Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Supreme Court Hears Challenge to Bankruptcy Releases Shielding Sacklers in Purdue Settlement
Summary
In Harrington v. Purdue Pharma, the Supreme Court questioned whether 11 U.S.C. §1123(b)(6) allows bankruptcy plans to bar claims against nondebtors (notably the Sackler family). The U.S. Trustee urged the Court to forbid nonconsensual third‑party releases; respondents said the releases were necessary to secure roughly $6 billion for opioid abatement and victim relief.
The Supreme Court heard argument in Harrington v. Purdue Pharma over whether a Chapter 11 plan may include a nonconsensual release that would bar claims against nondebtors, principally members of the Sackler family, who did not themselves seek bankruptcy protection. The United States Trustee told the Court that such releases "are not authorized by the bankruptcy code," arguing they extinguish property rights that are not part of the bankruptcy estate and raise serious due‑process and Seventh Amendment concerns ("nonconsensual third party releases are not authorized by the bankruptcy code," said Mister Gannon, counsel for the U.S. Trustee). Respondents and creditor representatives said narrowly tailored releases are authorized by the plain text of 11 U.S.C. §1123(b)(6) and by decades of bankruptcy practice and were necessary here to secure a multi‑billion‑dollar settlement for victims.
The core legal dispute focused on the reach of §1123(b)(6), the catchall provision that permits "any other appropriate…
Already have an account? Log in
Subscribe to keep reading
Unlock the rest of this article — and every article on Citizen Portal.
- Unlimited articles
- AI-powered breakdowns of topics, speakers, decisions, and budgets
- Instant alerts when your location has a new meeting
- Follow topics and more locations
- 1,000 AI Insights / month, plus AI Chat