On August 10, 2023, the United States Supreme Court granted certiorari to decide “whether the Bankruptcy Code authorizes a court to approve, as part of a plan of reorganization under Chapter 11 of the Bankruptcy Code, a release that extinguishes claims held by nondebtors against nondebtor third parties, without the claimants’ consent.”

Greenberg Glusker attorneys Brian Davidoff and Hannah Waldman authored an amicus curiae brief on behalf of the Commercial Law League of America and the National Venue Reform Committee, asking the Court to consider how affirming the multi-factor test adopted by the Second Circuit to determine the permissibility of non-consensual third-party releases would further encourage Chapter 11 debtors to forum shop. While the issue before the Court is not about venue shopping, it is part of the fabric of how the case came to be before the Court. Harrington v. Purdue Pharma presents the quintessential case of Chapter 11 forum shopping.  The negative consequences of forum shopping include undermining the integrity of the bankruptcy system, preventing smaller creditors from participating in the bankruptcy process, and allowing debtors to affect the rights of litigants across the county by subjecting them to the forum’s procedural laws.

For more information on this topic, the amicus brief can be found here.

The Court will hear oral arguments on December 4, 2023.

Resources

• U.S. Supreme Court Amicus Curiae