Corporate Bankruptcy Changes Eyed by Democrats Following Purdue

A key Democratic lawmaker reintroduced legislation to rein in bankruptcy protections granted to nondebtors after the US Supreme Court rejected Purdue Pharma LP’s $6 billion bankruptcy settlement that contained liability releases for members of the billionaire Sackler family.

The Nondebtor Release Prohibition Act of 2024 from Rep. Jerrold Nadler (D-N.Y.), the top Democrat on the House Judiciary Committee, would ban bankruptcy shields for nondebtors while addressing several issues the high court avoided in its 5-4 decision in Harrington v. Purdue Pharma. The court declined, for instance, to rule on what constitutes consent and the legality of protections that temporarily ...