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On October 27, 2023, the NAM filed an amicus brief asking the U.S. Supreme Court to uphold bankruptcy courts’ broad equitable authority to issue third-party releases to ensure the success of a corporate reorganization plan. In this case, Purdue Pharma sought to resolve mass civil claims alleging that the company contributed to the opioid epidemic through the bankruptcy system. The Sackler family—owners of Purdue—agreed to personally contribute billions of dollars to the bankruptcy provided that all civil claims against them were released. A trial court ruled that the bankruptcy court lacked authority under the Bankruptcy Code to approve a reorganization plan that included nonconsensual releases for third parties (like the Sacklers), a decision the 2nd Circuit later reversed. The U.S. Supreme Court granted certiorari to consider “[w]hether the Bankruptcy Code authorizes a court to approve, as part of a plan of reorganization under Chapter 11 of the Bankruptcy Code, a release that extinguishes claims held by nondebtors against nondebtor third parties, without the claimants’ consent.

We argue in our amicus brief that nonconsensual third-party releases are important tools for addressing mass tort claims efficiently and fairly. Bankruptcy courts can confirm reorganization plans containing nonconsensual third-party releases consistent with due process requirements by giving claimants notice of the releases and an opportunity to be heard.