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ARTICLE · 08 APRIL 2025

Trend Watch: Third Party Releases In US Chapter 15 Proceedings

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United States (US) Bankruptcy Courts have issued orders recognizing and enforcing foreign restructuring orders under Chapter 15 that include nonconsensual third-party releases, notwithstanding the decision in Purdue against such releases.

CanadaInsolvency/Bankruptcy/Re-Structuring
Jesse Mighton
Jesse Mighton
Shawn Kirkman
Shawn Kirkman
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Key Takeaways

  • United States (US) Bankruptcy Courts have issued orders recognizing and enforcing foreign restructuring orders under Chapter 15 that include nonconsensual third-party releases, notwithstanding the decision in Purdue against such releases.
  • These cases demonstrate that Canadian cross-border restructuring proceedings can enhance optionality for such issues and promote successful restructuring outcomes.

Overview

On March 11, 2025, the US Bankruptcy Court for the District of Delaware issued an order under Chapter 15 of the US Bankruptcy Code recognizing and enforcing a restructuring plan under Mexican law that included nonconsensual third-party releases in its decision in Crédito Real.1 This is, at least, the third decision recognizing such releases post-Purdue.2

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