Reversing the district court, the Second Circuit reinstated the bankruptcy court’s confirmation of the chapter 11 plan of Purdue Pharma LP and its inclusion of nonconsensual releases of creditors’ direct claims against nondebtors, Rochelle’s Daily Wire reported today. In the majority’s 74-page opinion, Circuit Judge Eunice C. Lee found statutory authority for nondebtor, third-party releases in Sections 105(a) and 1123(b)(6) of the Bankruptcy Code and in “this Circuit’s caselaw stating that a bankruptcy court has authority to impose such releases.” Circuit Judge Richard C. Wesley wrote a 14-page concurrence that reads like a dissent and urges the Supreme Court to grant certiorari to resolve the split of circuits. Judge Wesley concurred in the judgment because he saw the issue as having been resolved in In re Drexel Burnham Lambert Grp., Inc., 960 F.2d 285, 293 (2d Cir. 1992), Second Circuit authority that “has not been overruled either by the Supreme Court or by this Court sitting en banc.” The third judge on the panel was Circuit Judge Jon O. Newman. Having served 44 years on the appeals court, he is the most senior judge on the Second Circuit.
