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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Bankruptcy

Date & Time
  • event Date

    Tuesday, August 20, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$297.00
CLE
ALL

This CLE webinar will analyze the anticipated impact of the Supreme Court's decision in Harrington v. Purdue Pharma L.P., 603 U.S. __ (2024). In Purdue Pharma, the Court held that the Bankruptcy Code does not authorize releases under a debtor’s Chapter 11 plan of reorganization in favor of third parties who have not filed bankruptcy. This panel will undertake a critical conversation about the majority and dissenting opinions in Purdue Pharma and discuss the vitality of third-party releases post Purdue Pharma.

Faculty

Kyung S. Lee
Partner
Shannon & Lee, LLP

Mr. Lee practices in the area of debt restructuring and corporate reorganizations. He has served as debtor's counsel for companies in the airline, real estate, oil and gas, communications, healthcare, distribution, manufacturing and convenience store industries. He has also represented lenders, creditors, creditors' committees and investors involved in workouts and Chapter 11 reorganizations as well as litigating on behalf of the various parties. He has extensive experience working closely with senior management and financial advisors on valuation of enterprises and assets and development of turnaround and restructuring business plans.

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Andrew M. Troop
Partner
Pillsbury Winthrop Shaw Pittman LLP

Mr. Troop, Pillsbury’s Insolvency & Restructuring Practice Group Leader, advises a global clientele on business reorganizations, debtors’ and creditors’ rights and crisis response, representing them in high-profile cases and related litigation. He represents debtors, creditors, acquirers, landlords, and creditors’ and equity committees from diverse industries both in and out of court. Mr. Troop has helped private equity clients acquire, sell and reorganize U.S. and international portfolio companies and defend fraudulent transfer and breach of duty claims. He also represents nonprofits in debtors’ and creditors’ rights matters, and has distinguished himself representing States in complex restructurings where State priorities and the U.S. Bankruptcy Code intersect.

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Description

On June 27, 2024, the Supreme Court issued its landmark 5-4 decision in Purdue Pharma. The decision relies on statutory construction and rejects what it called policy arguments.

The Court struck down the efforts by the parties to release the Sacklers under the plan, in exchange for the Sacklers’ contributing almost $6 billion to the debtors. Since the decision, the creditors’ committee in Purdue Pharma has commenced adversary proceedings against the Sacklers seeking to find them culpable for the damage caused by their conduct in marketing and distributing oxycontin. It is unclear whether the Purdue Pharma estate will be able to recover anywhere near the amount agreed to by the Sacklers prior to the ruling by the Supreme Court. Yet, the recovery to the injured claimants seems to have played little role in the Supreme Court decision. Instead, the Court focused strictly on statutory construction of the Bankruptcy Code in striking down the third-party releases in favor of the Sacklers.

But by invalidating all third-party releases, the Court removed a longstanding and key bankruptcy tool used to resolve mass tort and other complex cases. Does Purdue Pharma signal the end of bankruptcy courts as a venue to resolve mass torts, except for the asbestos provisions specifically set out in Bankruptcy Code § 524(g)? Or is there still room to argue that non-consensual releases can still be proper under the right circumstances in a bankruptcy case? What can or will be used to replace third-party releases and what are the consequences of being unable to do so?

Listen as this experienced panel of bankruptcy attorneys reviews the decision and then discusses where it leaves us, any possible loopholes or new restrictions, what we might expect going forward for various non-debtor constituencies, and what if anything it tells us about how broadly we can read the Bankruptcy Code.

Outline

  1. Review of Purdue Pharma majority and dissenting opinions
  2. Critical analysis of the majority decision: textual view of the Bankruptcy Code
  3. Dissenting opinion of Purdue Pharma: Isn’t this how bankruptcy lawyers look at the problem?
  4. Recommended best practices for debtors in light of Purdue Pharma when trying to solve mass tort problems going forward

Benefits

The panel discussion will touch on and comment on the ancillary effects of the Purdue Pharma decision including but not limited to:

  • What does Purdue teach about the limits of the Bankruptcy Court's statutory and equitable powers regarding types of bankruptcy relief not specifically mentioned in the Code?
  • What alternatives exist for obtaining the benefits offered by third party releases?
  • Are exculpation provisions affected?
  • Does Purdue change the way practitioners should read “catch-all” provisions?
  • Should insolvent debtors focus more on D & O coverage?
  • What other strategies can be deployed knowing the limitations on use of third-party non-debtor non-consensual releases?