Clifford Chance

Chapter 15: A Lifeline for Nonconsensual Third-Party Releases in a Post-Purdue World

April 24, 2025

In Harrington v. Purdue Pharma, the U.S. Supreme Court held that Chapter 11 of the US Bankruptcy Code does not provide bankruptcy courts with the authority to approve nonconsensual third-party releases. Shortly thereafter, we published an article theorizing that companies with a multinational presence could nevertheless potentially obtain nonconsensual third-party releases from foreign courts under foreign law and then have those releases "recognized" in the US under Chapter 15 of the Bankruptcy Code. Two recent decisions, one from Judge Horan in the District of Delaware and one from Judge Glenn in the Southern District of New York have now confirmed the availability of Chapter 15 as a vehicle to obtain US recognition of nonconsensual third-party releases granted as part of a foreign insolvency proceeding. In this update, we will explore these two decisions.

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