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Consensual Third-Party Releases in Chapter 11 Plans: Authority, Structure, Consent Mechanisms, Court's Gatekeeper Role

Initial Reaction and Commentary to Purdue Pharma decision

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Tuesday, June 13, 2023

Recorded event now available

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This CLE webinar will review consensual third-party (non-debtor) releases in Chapter 11 plans of reorganization. The program will focus on when consensual third-party releases may be permissible; factors courts consider in deciding whether they are allowable; what constitutes consent; the permissible scope of consensual releases; what claims or conduct cannot be released; and how to structure, obtain approval for (or object to), and administer consensual releases. The panel will also discuss the bankruptcy court's "gatekeeping" role as a factor in the debate.


The circuits are split over the meaning of Bankruptcy Code Section 524(e) and whether bankruptcy courts can even grant releases to non-debtors. Where third-party releases are allowed, courts have adopted various standards for determining approval of releases, the scope of the releases, who may be released, and what may not be released.

Plans that include consensual releases by which each creditor must affirmatively consent or be deemed to consent to the third-party release present unique issues. For starters, there is no uniform definition of consent in the context of third-party releases. If the release is not granted, novel solutions have evolved to prevent rampant post-confirmation litigation against key players in the bankruptcy.

Listen as this experienced panel discusses which third-party entities can obtain releases for what claims and how these releases are negotiated, structured, and granted in order to avoid the problem of non-consensual releases.



  1. Review of circuit split over Section 524(e)
  2. Factors courts consider in deciding whether to permit releases
  3. Structure and scope of permissible releases
  4. Consequences when releases are not consented to
  5. Strategies for release for proponents and objectors


The panel will discuss these and other key issues:

  • What parties typically seek and are granted releases?
  • Does consent resolve the Section 524(e) debate?
  • Does a third-party release leave a creditor unimpaired?
  • How should consents be structured: opt-out, opt-in?
  • What is the effect of not granting a release?


Durrer, Van
Van C. Durrer, II

Skadden Arps Slate Meagher & Flom

Mr. Durrer leads the Firm's corporate restructuring practice in the western United States and advises clients...  |  Read More

Ferguson, Tyler
Tyler R. Ferguson

Mayer Brown

Mr. Ferguson is a partner in the Chicago office of Mayer Brown and is a member of the firm’s Restructuring...  |  Read More

Webb, Lydia
Lydia R. Webb

Gray Reed & McGraw

Ms. Webb focuses her practice on representing and advising debtors, creditors, committees and post-confirmation...  |  Read More

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