Summary
A 2024 Supreme Court ruling determined that non-debtor releases are not authorized under Chapter 11 of the Bankruptcy Code. This decision effectively invalidated the protective provisions within the Purdue Pharma opioid settlement plan, a framework proposed by the Sackler family. The Court's rationale emphasized the necessity of safeguarding the rights of non-consenting claimants.
Summary
A 2024 Supreme Court ruling determined that releases for parties not involved in a bankruptcy filing are not permitted under Chapter 11 of the U.S. Bankruptcy Code. This decision specifically rejected the bankruptcy reorganization plan for Purdue Pharma, a company owned by the Sackler family. The plan had sought to shield the Sackler family from lawsuits related to the opioid crisis. The Court's rationale was to protect the rights of individuals who did not agree to such releases, ensuring their ability to pursue legal claims remains intact.
Summary
In a 2024 decision, the Supreme Court determined that certain legal protections for parties not involved in a bankruptcy case are not permitted under Chapter 11 bankruptcy law. This ruling rejected a part of the plan proposed by the Sackler family concerning the Purdue Opioid crisis. The family’s plan had sought to protect them from lawsuits through Purdue Pharma's bankruptcy proceedings. The Court's decision was made to ensure that individuals who did not agree to the settlement could still pursue their legal claims.
Summary
In 2024, the Supreme Court decided that a bankruptcy rule (Chapter 11) does not allow plans to protect people who do not owe money. This decision stopped a plan for the Sackler family. Their plan aimed to protect them from lawsuits related to Purdue's opioid medication. The court ruled that this was because people who did not agree to the plan needed to be kept safe.