Harrington v. Purdue Pharma L.P.

Questions presented

SCOTUS records, cert granted 10 Aug 2023

Whether 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.

Opinion summary

Etalia.ai summary of the majority opinion

The case involves a legal dispute between the bankruptcy trustee, Harrington, and Purdue Pharma L.P., concerning the approval of Purdue's bankruptcy plan. The central issue was whether the plan could include non-consensual third-party releases that shielded members of the Sackler family from civil liability related to their role in Purdue’s opioid crisis. The Supreme Court had to determine if such releases were permissible under federal bankruptcy law. Ultimately, it ruled that these types of broad protections for non-debtors are not allowed without explicit congressional authorization. This decision has significant implications for future corporate bankruptcies involving similar circumstances where individuals seek immunity through company settlements.