Bankruptcy partner Daniel Cohn contributed to the drafting of an amicus curiae brief filed by the American College of Bankruptcy that played a key role in the Supreme Court’s recent decision in the Purdue Pharma bankruptcy case.
The case concerned “third-party releases” whereby a debtor in bankruptcy attempts to protect non-debtors who might also be liable to its creditors. The chapter 11 plan of opioid-maker Purdue Pharma included releases of Purdue’s owners, the Sackler family, from opioid-related liability even though the Sacklers themselves had not filed for bankruptcy. The Court held that Purdue’s plan could not release the claims of opioid victims without their consent.
The College’s brief, taking the side of neither party, cautioned the Court that if it were to (as it ultimately did) bar the third-party releases in Purdue, the Court should not call into question the use of third-party releases in other contexts where “commonplace, important to the bankruptcy system, and broadly accepted by the courts and practitioners as necessary and proper.” Writing for the Court, Justice Gorsuch did indeed craft his opinion narrowly. As the College had urged, the Court specified that its decision did not bar bankruptcy courts from ordering third-party releases of claims that were property of the bankruptcy estate nor where the releasing party consented. Citing the College’s brief six times, Judge Kavanaugh’s dissenting opinion argued that the Court should have upheld the Purdue releases rather than drawing a line protecting only the types of releases the College’s brief endorsed.
The American College of Bankruptcy is an organization of lawyers, judges, academics, and other insolvency professionals, who are selected as fellows based on years of achievement in their chosen professions and service to the bar, the community and their profession. As set forth in its Mission Statement, the College is “dedicated to the enhancement of professionalism, scholarship and service in bankruptcy and insolvency law and practice.”
Dan Cohn, one of New England’s leading counsel to distressed enterprises and their creditors, is also a trained mediator and frequent lecturer on bankruptcy law. A fellow of the American College of Bankruptcy, he serves as chair of its Bankruptcy Policy Committee which considers what positions the College should take before Congress and the Supreme Court.
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