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Does a bankruptcy court have the power to enter a final order in a fraudulent-transfer action where the defendant has not filed a proof of claim, or is the bankruptcy court limited to submitting proposed findings of fact and conclusions of law to the district court for de novo review and entry of judgment? On March 11, 2019, in Paragon Litigation Trust v. Nobel Corp., et al. (In re Paragon Offshore PLC, et al.),[1] Delaware Chief Bankruptcy Judge Christopher S.

In a “code-driven” discipline such as bankruptcy, third-party releases are a rare breed. As a form of equitable relief available to certain nondebtors in certain court-decreed circumstances in certain circuits, they are shrouded in a level of uncertainty seldom seen elsewhere. A recent holding from In re FirstEnergy Solutions Corp. that denied the approval of the debtors’ disclosure statement because it contained fatally flawed releases highlights this confusion and offers much-needed guidance to future plan proponents.

Third-Party Releases in a Nutshell