Professor Gregory Germain has contributed an expert analysis article to Law 360 on the Purdue Phrama Chapter 11 case that is now before the Supreme Court.
In “What Happens If High Court Rejects Releases In Purdue Ch. 11”, Germain examines the question: Do bankruptcy courts have the power to discharge or release claims held by non-debtor parties against other non-debtor parties, or is the power to discharge debts limited to claims against the bankrupt debtor?
He concludes, “If the Second Circuit upheld an opt-out plan, and the Supreme Court refused to hear the certiorari petition, the plan would be effective and binding. That strikes me as the most likely end to the case, as all of the active creditors support the deal, few of the little creditors will opt out, and even fewer, if any, will have the wherewithal to seriously threaten the Sacklers’ well-funded and well-planned defenses.”