Exculpation Provisions in Chapter 11: Recent Developments and Practice Tips
Author: Kimberly A. Posin.; Nicholas J. Messana.; Jonathan C. Gordon.; Deniz A. Irgi.
Source: Volume 39, Number 03, March 2023 , pp.35-39(5)
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Abstract:
Exculpation provisions are common in chapter 11 plans and intended to encourage parties to participate in the chapter 11 process. In this article, the authors begin by reviewing the purpose and law pertaining to such provisions. They then turn to a detailed discussion of three recent chapter 11 reorganizations in which the courts required proponents to narrow the scope of the proposed exculpations. They close with practice tips to avoid potential confirmation disputes and delayed confirmation orders.Keywords: In re Mallinckrodt PLC; In re Paddock Enterprises, LLC; In re Highland Cap. Mgmt., L.P.
Affiliations:
1: Latham & Watkins LLP; 2: Latham & Watkins LLP; 3: Latham & Watkins LLP; 4: Latham & Watkins LLP.