Congress Seeks to Restrict Nondebtor Releases in New Bankruptcy Reform Bill

Members of Congress recently introduced the Nondebtor Release Prohibition Act, which proposes to amend the Bankruptcy Code to, among other things, restrict courts' ability to approve third-party releases of nondebtors and related injunctions under plans of reorganization or otherwise in Chapter 11 cases.

8 minute read October 01, 2021 at 12:03 AM
By
Thomas R. Califano and Anna Gumport
Congress Seeks to Restrict Nondebtor Releases in New Bankruptcy Reform Bill

On July 28, 2021, certain members of Congress introduced the Nondebtor Release Prohibition Act of 2021 (S. 2497) (NRPA), which proposes to amend the Bankruptcy Code to, among other things, restrict courts' ability to approve third-party releases of nondebtors and related injunctions under plans of reorganization or otherwise in Chapter 11 cases.

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