HHR Bankruptcy Report

Category Archives: Third party release

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Does Stern v. Marshall Prohibit Non-Consensual Third Party Releases of Non-Bankruptcy Claims in Plans of Reorganization?

Posted in Delaware, Stern v. Marshall, Third party release
An increasingly common aspect of Chapter 11 plans is non-consensual third party releases, which are often a vital tool required to obtain global peace among competing constituencies whose support is often needed for a debtor to obtain confirmation of a Chapter 11 plan. However, the parameters of a bankruptcy court’s Constitutional authority to approve such… Continue Reading

A Third Party Release in a Confirmed Plan Shields Against Unknown and Nonexistent Claims

Posted in Chapter 11, Section 502(h), Third party release
Bankruptcy law and business expectations converged in the Residential Capital (“ResCap”) proceeding when the Bankruptcy Court confirmed that the third party release contained in ResCap’s plan of reorganization protected ResCap’s non-debtor parent from claims that were not known and did not exist at the time the plan was confirmed. The Bankruptcy Court reasoned that Section… Continue Reading