To Release or Not to Release? Courts Remain Split on Release Provisions

Third-party release provisions are a common feature of almost every chapter 11 plan in large bankruptcy cases. Despite this, there has long been a split among bankruptcy courts and Circuit Courts of Appeal on the scope and permissibility of such third-party release provisions. With the recent wave of large, high-profile chapter 11 cases filed to address mass tort liabilities, a number of prominent courts have recently weighed in on the validity and propriety of third-party releases.