Government to Seek Supreme Court Review of Purdue’s Third-Party, Nondebtor Releases
In a motion to stay the issuance of the mandate, the government has announced that it will be filing a petition for certiorari asking the Supreme Court to review the Second Circuit’s Purdue decision allowing bankruptcy courts to issue releases to nondebtors. The Second Circuit’s May 30 decision reversed the district court and reinstated the bankruptcy court’s confirmation of the chapter 11 plan of Purdue Pharma LP. The New York-based court of appeals held that chapter 11 plans may include nonconsensual releases of creditors’ direct claims against nondebtors. Purdue Pharma LP v. City of Grand Prairie (In re Purdue Pharma LP), 69 F.4th (2d Cir. May 30, 2023). The motion filed by the government on July 7 states that “the [U.S.] Solicitor General has determined to seek review of the panel’s decision in the Supreme Court” before the August 28 deadline. The government’s motion characterized Purdue’s chapter 11 plan as giving absolute, unconditional and permanent releases “from every conceivable type of opioid-related civil” claims to members of the Sackler family that owned and controlled the company.