Purdue Ruling Tees Up ‘Consent’ Question for Bankruptcy Courts

The US Supreme Court, in rejecting Purdue Pharma LP‘s bankruptcy plan, definitively shut down third-party litigation shields that don’t have consent from creditors. Now it’s up to bankruptcy courts to determine what, exactly, counts as “consent.”

The answer is likely going to boil down to judges’ views on the specific language and presentation of documents sent to creditors who are entitled to vote on a company’s bankruptcy exit plan.

“Third-party releases are a very important part of the process, but they’re going to have to be consensual, and we’re going to have to spend some time figuring out what ...