Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
The Future Viability of 105(a) Injunctions Following the Supreme Court's Decision In 'Purdue Pharma'
The U.S. Supreme Court's recent decision in Purdue Pharma has put an end to the use of permanent plan injunctions in the form of nonconsensual third-party releases as a reorganizational tool in Chapter 11, at least for now. What was not addressed by the Supreme Court in Purdue Pharma is the propriety of temporary injunctions that halt third-party litigation pending formulation of a Chapter 11 plan (typically a plan that would contain nonconsensual third-party releases). At the outset of a Chapter 11 case, debtors often seek entry of a preliminary injunction pursuant to Section 105(a) of the Bankruptcy Code extending the automatic stay to and temporarily enjoining litigation against nondebtors. Commonly referred to by bankruptcy practitioners and courts as a "105(a) injunction", this relief is particularly prevalent in cases, like Purdue Pharma, involving multi-party, mass tort litigation where the debtor and certain nondebtors may be co-defendants in prepetition litigation with shared insurance, defenses, evidence and liability.
The rationale for a 105(a) injunction is to stay litigation that could impede the debtor's reorganization such as by depleting insurance assets, increasing estate liability through indemnification and contribution claims, or distracting debtor principals from attending to their responsibilities in Chapter 11 and formulating a plan. Underpinning most every request for a 105(a) injunction, and particularly in the mass tort bankruptcy context, is the debtor's primary objective of stopping litigation in multiple forums in favor of addressing claimants' claims in a single forum (the bankruptcy court) pending an eventual permanent injunction under a plan which includes third-party releases in favor of the nondebtor defendants and/or co-obligors. The breathing spell afforded by a 105(a) injunction enables creditors to analyze whether they would support an eventual plan containing third-party releases.
Until now, a successful reorganization assumed the debtor could confirm a plan with nondebtor releases and injunctions based on less than full creditor consensus. Now that nonconsensual releases in Chapter 11 plans are no longer permitted, will debtors have a more difficult time obtaining a 105(a) injunction, even if only pending confirmation of a plan of reorganization?
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
Yachts, Jets, Horses & Hooch: Specialized Commercial Leasing Models
Defining commercial real estate asset class is essentially a property explaining how it identifies — not necessarily what its original intention was or what others think it ought to be. This article discusses, from a general issue-spot and contextual analysis perspective, how lawyers ought to think about specialized leasing formats and the regulatory backdrops that may inform what the documentation needs to contain for compliance purposes.
Hyperlinked Documents: The Latest e-Discovery Challenge
As courts and discovery experts debate whether hyperlinked content should be treated the same as traditional attachments, legal practitioners are grappling with the technical and legal complexities of collecting, analyzing, and reviewing these documents in real-world cases.
Identifying Your Practice's Differentiator
How to Convey Your Merits In a Way That Earns Trust, Clients and Distinctions Just as no two individuals have the exact same face, no two lawyers practice in their respective fields or serve clients in the exact same way. Think of this as a "Unique Value Proposition." Internal consideration about what you uniquely bring to your clients, colleagues, firm and industry can provide untold benefits for your law practice.
Risks and Ad Fraud Protection In Digital Advertising
The ever-evolving digital marketing landscape, coupled with the industry-wide adoption of programmatic advertising, poses a significant threat to the effectiveness and integrity of digital advertising campaigns. This article explores various risks to digital advertising from pixel stuffing and ad stacking to domain spoofing and bots. It will also explore what should be done to ensure ad fraud protection and improve effectiveness.
Turning Business Development Plans Into Reality
This article offers practical insights and best practices to navigate the path from roadmap to rainmaking, ensuring your business development efforts are not just sporadic bursts of activity, but an integrated part of your daily success.