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

Part Two of a Two-Part Article In Part Two, we continue the analysis by evaluating two constitutional issues arising from third-party releases: whether creditor consent to be bound by a third-party release is required to satisfy the due process clause of the Fifth and Fourteenth Amendments; and whether bankruptcy courts have constitutional authority to issue final orders granting third-party releases in a plan of reorganization under Stern v. Marshall.

17 minute read June 01, 2023 at 12:05 AM
By
John J. Rapisardi and Jacob T. Beiswenger
The Role of Third-Party Releases In Successful Chapter 11 Reorganizations

In the April 2023 issue, we published Part One of this article examining the role of third-party releases in successful Chapter 11 reorganizations. That article evaluated whether and to what extent third-party releases are permissible to release nondebtors from liabilities that are intertwined with the debtor's liabilities.

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