Chapter 11 Plan Third-Party Release Provisions: Structuring or Objecting to Non-Debtor Releases

A live 90-minute CLE video webinar with interactive Q&A


Wednesday, November 10, 2021

1:00pm-2:30pm EST, 10:00am-11:30am PST

Early Registration Discount Deadline, Friday, October 15, 2021

or call 1-800-926-7926

This CLE course will discuss the current treatment of consensual and nonconsensual third-party releases in Chapter 11 reorganization plans. The panel discussion will include current approaches to incorporating release and discharge provisions into a Chapter 11 plan, what constitutes consent for various classes of creditors, how creditors should evaluate and respond to such provisions based on recent case law, and forum shopping for courts that will approve such releases.

Description

Third-party releases in reorganization plans remain contentious and are often challenged when affected creditors have not expressly consented. Courts scrutinize these kinds of releases which have become broader and broader over the past few years. Some courts have held that an affirmative showing of consent is required. In contrast, others have found that general release clauses can effectively bind parties who do not participate in the confirmation process. In some cases, the parties' release must contribute to the plan funds. Counsel for debtors should consider steps to bolster the likelihood of approval of third-party releases as consensual.

Section 105(a) of the Bankruptcy Code gives the bankruptcy court the power to decide whether parties explicitly or implicitly consented to a release, weighing factors such as whether the provisions are fair, equitable, and reasonable and are in the best interests of the debtor, its estate, and parties in interest.

From the creditor's perspective, Chapter 11 plans frequently include broad third-party release provisions that might bind creditors who take no action concerning a plan or fail to "opt-out" of a release. Practitioners must develop a strategy for analyzing these releases on behalf of creditor clients, determining the scope and nature of any proposed releases and who is being released, and scrutinizing plan ballots regarding potential opt-out requirements. A timely objection must be filed if necessary.

Listen as our authoritative panel of bankruptcy practitioners discusses how to structure third-party release provisions in Chapter 11 plans, the standards that courts apply in approving releases, and the steps creditors' counsel should take in reviewing and objecting or otherwise responding to such provisions.

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Outline

  1. Court standards for approving third-party releases
  2. Requirements for adequate disclosure of third-party releases
  3. Recent case law developments: explicit vs. implicit consent
  4. Structuring non-debtor releases
  5. Analyzing and objecting to non-debtor releases

Benefits

The panel will review these and other priority issues:

  • What factors do courts consider in determining whether third-party releases are appropriate?
  • How should third-party releases be drafted to avoid disclosure deficiencies?
  • How should creditors, bondholders, and other constituents evaluate release provisions to determine the appropriate response?

Faculty

Bank, Jason
Jason W. Bank

Member
Kerr Russell and Weber

Mr. Bank has over 20 years of experience in bankruptcy and restructuring and general corporate law. He focuses his...  |  Read More

Best, Brendan
Brendan G. Best

Partner
Varnum

Mr. Best is a partner, chair of Varnum's Restructuring Group, and co-leader of the Banking, Restructuring, and...  |  Read More

Attend on November 10

Early Discount (through 10/15/21)

Cannot Attend November 10?

Early Discount (through 10/15/21)

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

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