Shields

Supreme Court Decision Reshapes Future of Mass Tort Bankruptcies, Limits Legal Shields for Non-Debtors

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NEW YORK — The Uamsung the decision by the Supreme Court could signal a pivot in the way corporations may use bankruptcy proceedings to settle massive lawsuits. This follows a recent decision which invalidated a key part of the agreement that would have resolved multidistrict litigation against Purdue Pharma, the manufacturer of OxyContin. The court ruled against the ability of bankruptcy courts to absolve claims directed at third parties who have not themselves declared bankruptcy—a standard practice that had been utilized by firms facing sizable litigation burdens. For years, bankruptcy courts provided a setting allowing … Read more

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