Purdue Stops at the Border? Chapter 15 and Foreign Plan Releases

Short summary

Delaware and New York bankruptcy courts ruled that Chapter 15 foreign insolvency proceedings can enforce third-party releases in cases like Crédito Real and Odebrecht, despite the Supreme Court's Purdue Pharma decision restricting such releases in domestic Chapter 11 restructurings. The distinction stems from Chapter 15's broader statutory authority to grant relief in cross-border insolvencies. Courts found that releases approved by foreign courts with proper creditor notice and participation comply with US public policy.

• •Chapter 15 foreign bankruptcy proceedings can enforce third-party releases despite Purdue Pharma's restrictions on Chapter 11 cases
• •Two landmark cases (Crédito Real affirmed, Odebrecht ruled) establish different statutory frameworks govern relief authority
• •US courts will enforce foreign-approved releases if the foreign proceeding provided notice, creditor participation, and appellate remedies

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