Harrington v. Purdue Pharma L.P.
View Official PDFBelow are plain-language sections to help you understand what the Court decided in Harrington v. Purdue Pharma L.P. and why it matters. Quotes are taken from the syllabus (the Court’s short summary at the start of the opinion).
Summary
A short, plain-English overview of Harrington v. Purdue Pharma L.P..
The Supreme Court ruled that the bankruptcy code does not permit the discharge of claims against nondebtors, such as the Sackler family, without the consent of affected claimants. This decision reverses the Second Circuit's approval of Purdue Pharma's reorganization plan, which included a nonconsensual release for the Sacklers. The Court emphasized that the bankruptcy code's provisions focus on the debtor's rights and responsibilities.
Holding
The single most important “bottom line” of what the Court decided in Harrington v. Purdue Pharma L.P..
The Court held that the bankruptcy code does not authorize a release and injunction that discharge claims against a nondebtor without the consent of affected claimants.
Constitutional Concepts
These are the Constitution-related themes that appear in Harrington v. Purdue Pharma L.P.. Click a concept to see other cases that involve the same idea.
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Why Remedies and Relief is relevant to Harrington v. Purdue Pharma L.P.
The Court's decision focuses on the limits of the bankruptcy court's power to grant relief that discharges claims against nondebtors without consent.
Syllabus excerpt (verbatim)The bankruptcy code does not authorize a release and injunction that, as part of a plan of reorganization under Chapter 11, effectively seek to discharge claims against a nondebtor without the consent of affected claimants.
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Why Procedural Due Process is relevant to Harrington v. Purdue Pharma L.P.
The decision involves the procedural rights of claimants to consent to the discharge of claims against nondebtors.
Syllabus excerpt (verbatim)The district court vacated that decision, holding that nothing in the law authorizes bankruptcy courts to extinguish claims against third parties like the Sacklers, without the claimants' consent.
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Why Judicial Review is relevant to Harrington v. Purdue Pharma L.P.
The Court exercises its power of judicial review to interpret the bankruptcy code and invalidate the Second Circuit's decision.
Syllabus excerpt (verbatim)Because the Second Circuit held otherwise, its judgment is reversed and the case is remanded for further proceedings consistent with this opinion.
Key Quotes
Short excerpts from the syllabus in Harrington v. Purdue Pharma L.P. that support the summary and concepts above.
The bankruptcy code does not authorize a release and injunction that, as part of a plan of reorganization under Chapter 11, effectively seek to discharge claims against a nondebtor without the consent of affected claimants.
The Sacklers have not filed for bankruptcy, nor have they placed virtually all their assets on the table for distribution to creditors.
Nothing in the opinion should be construed to call into question consensual third-party releases offered in connection with a bankruptcy reorganization plan.