Bankruptcy

Supreme Court Decision Reshapes Bankruptcy Strategy, Limits Liability Shields for Non-Debtors in Mass Tort Settlements

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New York — A recent Supreme Court decision has potentially narrowed the utility of bankruptcy as a tactic for resolving extensive lawsuits, impacting strategies employed by large organizations such as the Catholic dioceses, Boy Scouts of America, and opioid manufacturers. The ruling denied the ability of bankruptcy courts to clear legal claims against affiliated parties that have not themselves sought bankruptcy protection, a strategy previously available and frequently utilized in mass tort litigation. Historically, bankruptcy courts have offered valuable tools for entities crushed by substantial legal challenges. These tools include a stay on existing litigation, … Read more

Supreme Court Decision Challenges Traditional Bankruptcy Shields, Shakes Up Mass Tort Settlements

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New York — A recent Supreme Court decision could make bankruptcy a less favorable option for companies looking to settle massive legal battles. This landmark ruling rejected OxyContin manufacturer Purdue Pharma’s Chapter 11 settlement, impacting the way courts handle legal claims against third parties who haven’t filed for bankruptcy themselves. Bankruptcy courts have historically provided several mechanisms that facilitate the resolution of large-scale litigation, such as the ability to halt ongoing lawsuits and force unwilling claimants to adhere to settlements. These tools have been used in a variety of cases, including those involving allegations of … Read more

Supreme Court Overturns Sackler Family’s Liability Protection in Purdue Pharma Bankruptcy Case

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Washington, D.C. – In a landmark ruling, the U.S. Supreme Court has rejected a crucial element of Purdue Pharma LP’s Chapter 11 reorganization plan. The court’s decision specifically overturns a liability shield that would have protected the Sackler family, owners of Purdue, from future opioid-related lawsuits, dramatically reshaping the legal landscape for bankruptcy resolutions in mass tort cases. The justices ruled that granting such a shield exceeds the permissible bounds of bankruptcy law, fundamentally changing how companies can settle widespread liability through reorganization. Legal experts suggest that this decision sets a significant precedent for how … Read more

Supreme Court Decision on Purdue Case Raises Complexities for Mass Tort Resolutions in Bankruptcy

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Washington, D.C.—A recent Supreme Court decision concerning Purdue Pharma has set a new precedent that may substantially impact how mass tort liabilities are managed in bankruptcy cases across America. This ruling comes amidst a significant legal challenge concerning the restructuring of Purdue Pharma, the pharmaceutical giant largely blamed for its role in the opioid epidemic. The court’s decision complicates the path for companies seeking bankruptcy protection as a strategy to resolve massive tort liabilities. The case centered around Purdue Pharma’s proposal to resolve thousands of lawsuits linked to the opioid crisis through a restructuring plan … Read more