After the US Supreme Court nullified Purdue Pharma’s bankruptcy plan, judges are divided on the issue left unresolved by the high court regarding creditor consent. This matter, particularly surrounding third-party liability releases, has seen conflicting interpretations among judges, even within the same district.
In a 5-4 decision in June, the Supreme Court ruled that liability protections granted to Sackler family members—owners of Purdue—were illegal. The primary reason was the lack of consent from opioid victims and other creditors. However, Justice Neil M. Gorsuch, writing for the majority, did not specify what constitutes “consent” when creditors are voting on a bankruptcy plan—an omission that has led to various interpretations in subsequent judicial proceedings.
Justices in different cases have now reached differing conclusions on what qualifies as valid consent. These varied interpretations are shaping a complex and evolving legal landscape focused heavily on case specifics and principles of contract law. The full implications of this ambiguity are still emerging, and legal professionals are closely watching how these differing judicial opinions will impact future bankruptcy proceedings.
To read more about this ongoing legal conflict, refer to the full article here.