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Abstract: 

A bankruptcy debtor may maximize distributions to its creditors by offering third-party releases and exculpations to corporate executives and equity security holders through its reorganization plan. Nevertheless, a significant circuit court split remains on whether the Bankruptcy Code authorizes such releases. The recent proceedings in the Purdue Pharma bankruptcy highlight the conflicting judicial opinions and accentuate the need for further guidance from Congress or the U.S. Supreme Court.

Keywords: In re Purdue Pharma, L.P.; Chapter 11 Section 1123(b)(3)(A); Section 524

Affiliations:  1: Ballard Spahr LLP.