Bankruptcy, Reorganization & Capital Recovery Chair, Brian Davidoff, shared his perspective regarding Attorney General Rob Bonta's decision to appeal the bankruptcy reorganization plan given to the Sackler family, which grants them immunity from opiod-related lawsuits. Brian says that he "expects Bonta's appeal to challenge the constitutionality of the plan's nonconsensual third-party release of the Sackler family."

Excerpts: 

"Circuit Courts of Appeal have gone different ways on these third party injunctions."

"The Ninth Circuit and Tenth Circuit are part of the minority courts that have held that third party injunctions are not permissible under any circumstances in a bankruptcy case unless the party in whose favor the injunction is given has filed bankruptcy as well."

"However, the Second Circuit, where the Purdue case is pending, and also importantly, the Third Circuit Court of Appeal, have been much more open to allowing injunctions under certain circumstances. The Third Circuit has not wholeheartedly endorsed [third party releases] but they haven't rejected them either... The various appeals of the Purdue plan are likely going to land up in the United States Supreme Court, because of the circuit split and the notoriety of the Purdue case."

For more about the Purdue case and its impact on bankruptcy venue laws, visit this blog post on “Overheard in Bankruptcy,” the firm’s blog covering all things bankruptcy, capital recovery and restructuring.