Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

The Bankruptcy StrategistFeaturesBankruptcyLitigation

The Role of Third-Party Releases In Successful Chapter 11 Reorganizations

By By John J. Rapisardi and Jacob T. Beiswenger
April 01, 2023

For nearly three decades, courts have wrestled with whether and to what extent the U.S. Bankruptcy Code authorizes non-debtor, third-party releases in a Chapter 11 plan of reorganization. The results over that time have yielded continuing confusion and uncertainty. While three of the 11 Circuit Courts are united in disallowing third-party releases entirely, the other eight provide separate justifications for allowing them, and their differing standards are often disjointedly applied. Although such releases are supposed to apply only in "rare and unique" cases, as one judge observed, "almost every proposed Chapter 11 Plan that I receive includes proposed releases." In re Aegean Marine Petroleum Network, 599 B.R. 717, 726 (S.D.N.Y. 2019).

Given the increased frequency of this issue in recent cases and the continued uncertainty over when third-party releases can be properly granted under a Chapter 11 plan (if at all), we thought it timely to review the current state of the law on the topic and provide an examination of potential ways to resolve the controversy.

This premium content is locked for Entertainment Law & Finance subscribers only

  • 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

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Bankruptcy Sales: Finding a Diamond In the Rough Image

There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.

Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs Image

A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.

Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It Image

Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?

Blockchain Domains: New Developments for Brand Owners Image

Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.

Coverage Issues Stemming from Dry Cleaner Contamination Suits Image

In recent years, there has been a growing number of dry cleaners claiming to be "organic," "green," or "eco-friendly." While that may be true with respect to some, many dry cleaners continue to use a cleaning method involving the use of a solvent called perchloroethylene, commonly known as perc. And, there seems to be an increasing number of lawsuits stemming from environmental problems associated with historic dry cleaning operations utilizing this chemical.