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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

  • work Practice Area

    Bankruptcy

Date & Time
  • event Date

    Wednesday, November 10, 2021

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$297.00
CLE
ALL

This CLE course will discuss the current treatment of consensual and nonconsensual third-party releases in Chapter 11 reorganization plans. The panel discussion will include current approaches to incorporating release and discharge provisions into a Chapter 11 plan, what constitutes consent for various classes of creditors, how creditors should evaluate and respond to such provisions based on recent case law, and forum shopping for courts that will approve such releases.

Faculty

Jason W. Bank
Member
Kerr, Russell And Weber Plc

Mr. Bank has over 20 years of experience in bankruptcy and restructuring and general corporate law. He focuses his practice in the areas of commercial bankruptcy, out-of-court workouts, corporate restructuring and creditors’ rights. Mr. Bank is the chair of the firm's Bankruptcy and Restructuring Department.

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Brendan G. Best
Partner
Varnum LLP

Mr. Best is a partner, chair of Varnum's Restructuring Group, and co-leader of the Banking, Restructuring, and Finance Practice Team. His practice focuses on complex Chapter 11 restructurings, out-of-court workouts, and insolvency-related transactions and litigation. He has substantial experience advising stakeholders in insolvency-related matters across a wide array of industries including manufacturing, automotive, building supply and service, energy, oil and gas, health care, food service, gaming, hospitality, construction, and real estate.

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Description

Third-party releases in reorganization plans remain contentious and are often challenged when affected creditors have not expressly consented. Courts scrutinize these kinds of releases which have become broader and broader over the past few years. Some courts have held that an affirmative showing of consent is required. In contrast, others have found that general release clauses can effectively bind parties who do not participate in the confirmation process. In some cases, the parties' release must contribute to the plan funds. Counsel for debtors should consider steps to bolster the likelihood of approval of third-party releases as consensual.

Section 105(a) of the Bankruptcy Code gives the bankruptcy court the power to decide whether parties explicitly or implicitly consented to a release, weighing factors such as whether the provisions are fair, equitable, and reasonable and are in the best interests of the debtor, its estate, and parties in interest.

From the creditor's perspective, Chapter 11 plans frequently include broad third-party release provisions that might bind creditors who take no action concerning a plan or fail to affirmatively reject a release. Practitioners must develop a strategy for analyzing these releases on behalf of creditor clients, determining the scope and nature of any proposed releases and who is being released, and scrutinizing plan ballots regarding potential requirements for affirmatively declining to grant releases. A timely objection must be filed if necessary.

Listen as our authoritative panel of bankruptcy practitioners discusses how to structure third-party release provisions in Chapter 11 plans, the standards that courts apply in approving releases, and the steps creditors' counsel should take in reviewing and objecting or otherwise responding to such provisions.

Outline

  1. Basic principles of third-party releases
  2. Court standards for approving third-party releases
  3. Case law developments: third-party releases
  4. Drafting non-debtor releases
  5. Analyzing and objecting to non-debtor releases
  6. Pending legislation on third-party releases

Benefits

The panel will review these and other priority issues:

  • What factors do courts consider in determining whether third-party releases are appropriate?
  • How should third-party releases be drafted to avoid disclosure deficiencies?
  • How should creditors, bondholders, and other constituents evaluate release provisions to determine the appropriate response?