Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates

Nonconsensual Third-Party Releases Are Alive and Well in Chapter 15 Despite Purdue

Skadden Publication

James J. Mazza, Jr. Justin M. Winerman

Executive Summary

  • Who is impacted: Companies and organizations involved in cross-border insolvency proceedings, particularly those seeking to enforce or challenge nonconsensual third-party releases in the United States.
  • What is changing: Despite the U.S. Supreme Court’s 2024 Purdue decision barring nonconsensual third-party releases under a Chapter 11 plan, recent bankruptcy court opinions have recognized and enforced such releases under Chapter 15. Chapter 15’s statutory framework and focus on comity allow U.S. courts to grant relief, including nonconsensual third-party releases, that may not be available under a Chapter 11 plan.
  • Why it matters: These developments mean that nonconsensual third-party releases remain available in Chapter 15 cases, enabling companies to achieve outcomes in U.S. courts that may not be possible under a Chapter 11 plan. Companies may consider strategic filings of non-U.S. insolvency proceedings followed by Chapter 15 filings to enforce nonconsensual third-party releases in the U.S.
  • What to do next: Evaluate the potential benefits of pursuing foreign insolvency proceedings and subsequent Chapter 15 recognition and enforcement in the U.S. to obtain nonconsensual third-party releases. Monitor ongoing and future Chapter 15 cases for further developments and consider the implications for cross-border restructuring strategies.

The U.S. Supreme Court’s 2024 decision in Harrington v. Purdue Pharma L.P., 603 U.S. 204 (2024) (Purdue Decision), held that the Bankruptcy Code does not authorize nonconsensual third-party releases under a Chapter 11 plan of reorganization. Nonetheless, two recent bankruptcy court opinions recognized and enforced such releases under Chapter 15, which provides a framework for dealing with cross-border insolvency cases.

A critical aspect that helps explain this apparently distinct treatment is that Chapter 15 is different from Chapter 11 in its purpose and statutory framework. In contrast to Chapter 11’s goal of facilitating restructurings in the United States, the primary goal of Chapter 15 is to facilitate cooperation between U.S. and foreign courts through “ancillary” cases commenced to aid foreign insolvency cases.1

In furtherance of — and to assist in effectuating — this purpose, the Bankruptcy Code provides statutory authority in Chapter 15 not available in Chapter 11 to provide relief that is consistent with principles of comity,2 even where such relief may not be available under the Bankruptcy Code or other U.S. law.3

For instance, before the Purdue Decision, a number of courts agreed that Sections 1507 and 1521 authorize recognition and enforcement of nonconsensual third-party releases granted by a non-U.S. court, even if such releases would not otherwise be available under U.S. law.4

Now, two post-Purdue cases affirm that has not changed after the Supreme Court’s landmark decision.

This article first reviews Chapter 15 jurisprudence on nonconsensual third-party releases before the Supreme Court’s Purdue Decision, and then examines the two recent Chapter 15 cases subsequent to the Purdue Decision that demonstrate the continued availability of nonconsensual third-party releases in Chapter 15.

Pre-Supreme Court Purdue Chapter 15 Jurisprudence on Nonconsensual Third-Party Releases

Beginning with the case In re Metcalfe & Mansfield Alternative Investments, a number of U.S. courts extended comity to foreign court orders and found that Bankruptcy Code Sections 1507 and 1521 authorize recognition and enforcement of nonconsensual third-party releases granted by a non-U.S. court, even if such releases would not otherwise be available under U.S. law.

Metcalfe & Mansfield Alternative Investments. In In re Metcalfe, the U.S. Bankruptcy Court for the Southern District of New York evaluated a request to recognize nonconsensual third-party releases granted under a Canadian court order.5 The bankruptcy court noted that a recent U.S. Court of Appeals for the Second Circuit decision had rendered “uncertain” whether a bankruptcy court had jurisdiction to grant such a release in Chapter 11.6 Nonetheless, the Metcalfe court approved the releases in the Chapter 15 context.

In reaching its conclusion that such releases may be nonetheless recognized when granted by foreign courts, it noted:

[t]his Court is not being asked to approve such provisions in a plenary case; rather, the Court is being asked to order enforcement of provisions approved by the Canadian Courts. … [P]rinciples of enforcement of foreign judgments and comity in chapter 15 cases strongly counsel approval of enforcement in the United States of the third-party non-debtor release and injunction provisions included in the Canadian Orders, even if those provisions could not be entered in a plenary chapter 11 case.7

The bankruptcy court noted that the Canadian court had evaluated and dismissed challenges to its own jurisdiction to grant the release. Thus, the bankruptcy court, relying on those findings, approved the releases despite case law that created doubt as to a U.S. bankruptcy court’s jurisdiction to grant nonconsensual third-party releases in Chapter 11.

Sino-Forest Corp. Subsequently, in In re Sino-Forest Corp., the U.S. Bankruptcy Court for the Southern District of New York reaffirmed its decision in Metcalfe. In In re Sino-Forest, the bankruptcy court observed that the parties had a full and fair opportunity to litigate third-party releases in Canada, and that extending comity did not contravene any of the principles outlined in Section 1507(b).8 It noted that “the Canadian court’s decision to approve the non-debtor release reflected similar sensitivity to the circumstances justifying approving such provisions as those considered by U.S. courts.”9 For that reason, the bankruptcy court agreed that the third-party releases should be recognized and enforced in the United States.10

Avanti Communications Group PLC. In In re Avanti Communications Group PLC, the U.S. Bankruptcy Court for the Southern District of New York agreed to recognize an English-law scheme of arrangement that provided for the release of non-debtor subsidiary guarantees.11

The bankruptcy court distinguished In re Vitro S.A.B. de C.V., where the court had denied U.S. enforcement of third-party releases contained in a foreign restructuring plan because the foreign plan had been approved primarily by insider votes, and a majority of non-insider creditors had not voted in favor of the plan.12 In contrast, the Avanti court held that the English-law scheme adequately provided for creditor voting, and such creditors overwhelmingly voted in favor of the releases.13

The court observed that failure to recognize the releases could “result in prejudicial treatment of creditors to the detriment of the Debtor’s reorganization efforts and prevent the fair and efficient administration of the [r]estructuring.”14 Thus, the court recognized and enforced the scheme, including the releases.

These cases illustrate that the role of the bankruptcy court in evaluating nonconsensual third-party releases in a Chapter 15 case is not to determine whether such releases are appropriate under U.S. law, but rather to determine whether recognition and enforcement of such releases is a proper exercise of comity.15 To satisfy this standard, the foreign proceedings should, in line with the statutory authority provided under Bankruptcy Code Sections 1507 and 1521, satisfy U.S. notions of fundamental fairness and just treatment of creditors.

Two pre-Supreme Court Purdue cases are particularly notable for the bankruptcy court’s specific pronouncements on the permissibility of nonconsensual third-party releases in Chapter 15 cases, even where they may not have been available under Chapter 11.16

These cases are:

Huachen Energy Co. Ltd. Huachen Energy, a thermal power generator in the People’s Republic of China (PRC), sought Chapter 15 recognition in the U.S. Bankruptcy Court for the Southern District of New York of a financial restructuring of its funded debt, including approximately $578 million of New York law-governed senior secured notes, pursuant to a reorganization plan under the PRC Enterprise Bankruptcy Law.

The third-party releases released noteholder claims against certain non-debtor parties involved with the restructuring, including the notes trustee, the tabulation agent, the notes collateral agent, and other agents and relevant parties related to the notes or the restructuring. U.S. Bankruptcy Judge Lisa G. Beckerman granted recognition of Huachen Energy’s reorganization plan, including the nonconsensual third-party releases.

In approving the releases, Judge Beckerman noted:

Non-consensual third-party releases and what constitutes consent for a third-party release given in connection with a Chapter 11 plan of reorganization remains controversial under the United States Bankruptcy Code especially in light of the recent [district court decision in Purdue]. …17

However, this Court is not being asked to approve non-consensual third-party releases under the US Bankruptcy Code, but rather, to determine whether the recognition of the PRC’s decision is a proper exercise of [comity] in a Chapter 15 case.18

Accordingly, the bankruptcy court “provide[d] additional assistance in the form of recognizing and enforcing the releases in the plan” under Bankruptcy Code Sections 1507 and 1521.19 The bankruptcy court noted that creditors had a full and fair opportunity to vote on the plan and to be heard in the underlying proceedings based on the information and notice provided. As a result, “[p]rinciples of [comity] permit a United States Bankruptcy Court to recognize and enforce this plan.”20

Markel CATCo Reinsurance Fund Ltd. and its affiliate debtors (“CATCo” or the “CATCo Debtors”). Judge Beckerman similarly enforced third-party releases as part of the CATCo Chapter 15 cases.21 Notably, while Judge Beckerman indicated that there has been resistance to granting nonconsensual third-party releases in the Chapter 11 context, she noted the creative use of foreign restructuring tools and Chapter 15 to achieve a result that may not have been possible in a Chapter 11 case.22

CATCo comprised a Bermuda-based investment fund business that raised investor capital to invest in reinsurance products. After suffering historic losses in 2017 and 2018, the CATCo business began a runoff in 2019 to return remaining capital to investors as the underlying insurance policies were settled.

In 2020, an investor sued the former CATCo CEO on account of its losses. While this first suit was quickly settled, other investors also threatened or asserted similar claims. Here, any successful investor claims would ultimately have to be paid from fund assets due to various indemnities between the CATCo entities and their officers, and would therefore reduce assets available for distribution to fund investors in the runoff. Investors were thus incentivized to assert claims in order to avoid other investors jumping the queue and winning the “race to the courthouse.”

Additionally, as the total amount of investor losses significantly exceeded the amount of cash remaining in the funds, the CATCo funds became unable to make further distributions to investors as they needed to reserve amounts in respect of any other potential investor claims.

The CATCo Debtors proposed a buyout transaction to:

  • Resolve the uncertainty around further investor litigation.
  • Ensure that all investors were treated alike, and none gained an unfair advantage through litigation.
  • Facilitate the expeditious return of funds to investors.

Under the buyout transaction, the CATCo Debtors’ parent would fund the return of substantially all of the investors’ remaining capital invested in the CATCo Debtors as well as the investors’ pro rata shares of certain additional cash consideration.23 In exchange, the investors would grant comprehensive, third-party releases of any claims such investors may hold against the CATCo Debtors, the CATCo Debtors’ parent and their affiliates (the Releases).

To implement the buyout transaction:

  • The CATCo Debtors entered Bermudian provisional liquidation proceedings.
  • The CATCo funds proposed schemes of arrangement (the Schemes) to their investors (the Scheme Creditors) and sought U.S. Chapter 15 recognition and enforcement of those Bermudian proceedings.

Following negotiations and settlements with certain key investors who had objected to the Schemes, the Supreme Court of Bermuda (Bermuda Court) approved the Schemes and, in particular, the Releases. In a judgment, dated February 25, 2022 (Judgment), the Bermuda Court found that:

(a) the Releases are necessary in order to give effect to the proposed arrangement between the Scheme Companies and the Scheme Creditors; (b) the Releases are necessary for the Schemes to achieve their purposes; and (c) there is a sufficient nexus between the relationship between the Scheme Creditor and the Scheme Company on the one hand, and the release of Investor Claims against all of the Released Parties on the other hand. Thus, I am satisfied that the Releases fall within the jurisdiction of [the Bermuda Companies Act, governing schemes of arrangement].24

Judge Beckerman recognized and enforced the same in the CATCo Debtors’ Chapter 15 cases, noting that while nonconsensual third-party releases are still controversial in Chapter 11 (again, this was prior to the Supreme Court’s Purdue Decision):

this Court is not being asked in this case to approve nonconsensual third-party releases under the United States Bankruptcy Code in connection with a plan of reorganization, but instead is being asked to determine whether recognition of the Bermuda court’s decision is a proper exercise of comity in a case under chapter 15 in connection with the sanctioned schemes that were approved by the Bermuda court.25

The CATCo Debtors established a fulsome record to overcome any concerns the bankruptcy court may have with respect to the releases.26 Among other things, the CATCo Debtors presented as evidence:

  • A declaration from local Bermuda counsel attesting to the permissibility of third-party releases under Bermuda law.
  • The Bermuda Court’s judgment approving the Releases.
  • Key submissions in the Bermuda proceedings illustrating how the Releases were repeatedly disclosed to, and considered by, the Scheme Creditors.

Based on this robust record, Judge Beckerman stated: “[O]bviously, under Bermuda law, the [Bermuda] Court has clearly ruled that those [releases] are permissible under Bermuda law, both with respect to the statute and also with respect to the cases cited in the motion and the declaration that was filed by [local Bermuda counsel] as well.”27

In addition, the bankruptcy court noted that “[e]xtending comity to the releases and the injunction and other parts of the scheme sanction orders, and the schemes themselves, does not affect the just treatment of creditors.”28

Therefore, even though Judge Beckerman pointed out that there might be an issue with the “nonconsensual third-party releases, as a whole, and whether those are appropriate or legal, or satisfies the Second Circuit principles,” those issues were not before her in the Chapter 15 context.29

Instead, because “principles of enforcement of foreign judgments and comity in the chapter 15 cases strongly counsel approv[al] of enforcement in the United States of third-party nondebtor release and injunction provisions, even if those provisions could not be entered in a plenary Chapter 11 case,” the bankruptcy court granted the enforcement motion, including enforcement of the Releases.30

As a result of the enforcement of the Releases in the United States, the CATCo Debtors were able to successfully complete their restructuring and effectuate the buyout transaction.

Post-Purdue Chapter 15 Opinions

Crédito Real. In February 2025, Crédito Real S.A.B. de C.V. SOFOM, E.N.R. (Crédito Real), once one of Mexico’s largest non-bank lenders, filed for Chapter 15 in Delaware.31 The case followed a prepackaged proceeding under the Ley de Concursos Mercantiles (Concurso).32 The Concurso proceeding followed a liquidation proceeding under Mexican law and an earlier filed Chapter 15 proceeding, which was filed contemporaneously with an involuntary Chapter 11 proceeding brought by an ad hoc group of bondholders.33 To resolve the dispute around the liquidation, the involuntary Chapter 11 and the Chapter 15, Crédito Real, the Mexican liquidator (who then had control of Crédito Real’s assets) and the ad hoc group of bondholders executed a restructuring support agreement, which contemplated the prepackaged Concurso and the subsequent Chapter 15.34

The prepackaged plan filed in the Concurso case contained a nonconsensual release in favor of:

  • Crédito Real
  • the Mexican liquidator
  • the ad hoc group
  • the indenture trustee under Crédito Real’s U.S. bonds
  • their related parties (including directors and officers).

The release was customary under Mexican law and was approved by the Mexican court overseeing the Concurso process, not appealed and not made subject to a stay.35

When Crédito Real sought recognition of the Concurso plan in the Chapter 15 proceeding, one of its creditors, the U.S. International Development Finance Corporation (DFC) objected to the recognition of the Concurso plan, on the grounds that the release provision in the plan was not permitted under Chapter 15 and was manifestly contrary to U.S. public policy.36

DFC argued that the “catchall” provisions in Section 1521(a)(7) and 1507(a)37 are similar to Section 1123(b)38 of the Bankruptcy Code, which the Supreme Court held in Purdue was not a sufficient statutory basis to support the imposition of nonconsensual releases.39

The Court disagreed with DFC’s argument, holding that Congress had drafted the provisions of Chapter 11 to “direct[] courts to look to the whole of the Bankruptcy Code to determine if the request provision is consistent with it.”40 Conversely, the Court held that the applicable sections of Chapter 15 “direct a court to focus on principles of comity when considering granting the [requested] relief. Because comity is central to chapter 15, the relief granted in the foreign court does not have to be available in U.S. courts under chapter 11.”41

The Court next examined whether the inclusion of the release provision was manifestly contrary to the public policy of the United States. Here, the court relied heavily on the fact that Congress has permitted nonconsensual third-party releases in the context of an asbestos case.42 The Court held that, as outlined in the Purdue opinion, “Congress has authorized nonconsensual third-party releases before, and the Supreme Court has explicitly said that it could do so again in the context of chapter 11 if it so desired.”43

The Court held that the release provision was not manifestly contrary to public policy, and thus permissible, because “if permitting third-party releases is a policy decision that Congress can and has made, it cannot also be true that enforcing such releases where principles of cooperation and comity so require in chapter 15 would be ‘manifestly contrary to the public policy of the United States.’”44

DFC has appealed the recognition order permitting the releases, and the appeal is currently pending before the U.S. District Court for the District of Delaware.

Odebrecht. In Odebrecht Engenharia e Construção S.A.-Em Recuperação Judicial, the debtors, along with certain other related entities and affiliates (OEC Group), are one of the largest construction companies in the world and one of the largest private business groups in Brazil, with businesses in engineering, construction, and in the development and operation of infrastructure. In June 2024, facing headwinds from the COVID-19 pandemic and a financial crisis in Brazil, OEC Group filed for a Brazilian recuperação judicial (RJ) proceeding to implement a broad financial restructuring.45 OEC Group’s RJ plan contained the following provision:

The fulfillment of the payment obligations in accordance with the terms and conditions established in this Plan will entail, automatically and regardless of any additional, broad, general and unrestricted formality, the discharge of all Bankruptcy Credits against the Companies under Reorganization and their officers, directors, agents, employees and representatives.46

All parties agreed during the Chapter 15 recognition hearing that that provision does not constitute a nonconsensual third-party release. Nonetheless, the U.S. Trustee objected to portions of the proposed order granting recognition, asserting that the proposed order created impermissible nonconsensual third-party releases. The order provided:

Except as provided in paragraph 12 of this Order, all persons and entities are permanently enjoined and restrained from (i) commencing or taking any action or asserting any claim, within the territorial jurisdiction of the United States, that is inconsistent with, in contravention with, or would interfere or impede the administration, implementation and/or consummation of the RJ Plan, the Brazilian Confirmation Order or the terms of this Order; and (ii) taking any action against the Debtors or their property located in the territorial jurisdiction of the United States to recover or offset any debt or claims that are extinguished, novated, cancelled, discharged or released under the RJ Plan and the Brazilian Confirmation Order. No action may be taken within the territorial jurisdiction of the United States to confirm or enforce any award or judgment that would otherwise be in violation of this Order without first obtaining leave of this Court.

In particular, the U.S. Trustee argued that the language created “an expansive third-party release” because it “enjoins all persons and entities from taking any action.” Meanwhile, the foreign representative argued that the language was customary and approved in other Chapter 15 cases, did not create a third-party release, and even if it did, that enforcement was appropriate because Purdue did not apply in Chapter 15 cases.

Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York observed, as described above, that courts have long enforced restructuring plans in Chapter 15 cases, including those containing nonconsensual third-party releases, under Sections 1507 and 1521 of the Bankruptcy Code.

He noted that:

  • Section 1521(a) is “exceedingly broad” and enables courts to grant “any appropriate relief” so long as it is necessary to “effectuate the purpose of [Chapter 15] and to protect the assets of the debtor or the interests of the creditors.”
  • Section 1507 “permits a court to grant ‘additional assistance,” with the outer limit being Bankruptcy Code Section 1506, which precludes a court from enforcing an “action [that] would be manifestly contrary to the public policy of the United States.”

After observing that it was “not clear” that the language in the order cited above created a third-party release, Judge Glenn concluded that even if it did, “the Court finds that it has the power to issue such an order in a Chapter 15 case, pursuant to at least section 1521, in support of a foreign proceeding.” Notably, Judge Glenn observed that Purdue “did not say anything about limitations on the power of courts to act as ancillaries to foreign proceedings under chapter 15.”

Accordingly, Judge Glenn entered an order that arguably contained nonconsensual third-party releases to enforce a foreign plan that all parties agreed did not contain such releases. In so deciding, Judge Glenn determined that “there is no meaningful difference between enforcing, via order, a foreign plan with a third-party release provision, and issuing an order enforcing a foreign plan, which order contains a third-party release which itself is not in the foreign plan.” (Emphasis in original.) Judge Glenn then overruled the U.S. Trustee’s objection and held that the provision in the order was appropriate.

Conclusion

As these two recent cases show, nonconsensual third-party releases remain alive and well in Chapter 15 despite the Supreme Court’s Purdue Decision. Given that Chapter 15 is different in purpose and statutory framework, the cases interpreting Chapter 15 continue to permit nonconsensual third-party releases even though they are no longer permitted under a Chapter 11 plan.

Accordingly, these decisions could lead companies to consider strategic filings of non-U.S. insolvency proceedings followed by a Chapter 15 filing to enforce nonconsensual third-party releases that would not otherwise be available under a Chapter 11 plan.

_______________

1 See 11 U.S.C. § 1501.

2 See, e.g., In re Metcalfe & Mansfield Alt. Invs., 421 B.R. 685, 696 (Bankr. S.D.N.Y. 2010) (“Section 1507 directs the court to consider comity in granting additional assistance to the foreign representative”); In re Sino-Forest Corp., 501 B.R. 655, 664 (Bankr. S.D.N.Y. 2013) (noting that “the factors identified in section 1507(b)(1)–(5),” which include, among other things, consideration of just treatment of creditors, are “required to be considered in determining whether to extend comity in a case under chapter 15”); In re Avanti Commc’ns Grp. PLC, 582 B.R. 603, 616 (Bankr. S.D.N.Y. 2018) (“In deciding whether to grant appropriate relief or additional assistance under chapter 15, courts are guided by principles of comity and cooperation with foreign courts.”).

3 See 11 U.S.C. § 1507(a) (“[T]he court, if recognition is granted, may provide additional assistance to a foreign representative under this title or under other laws of the United States”) & 1521(a) (“Upon recognition of a foreign proceeding … the court may, at the request of the foreign representative, grant any appropriate relief”); see, e.g., In re Metcalfe, 421 B.R. at 697 (“[R]elief [post-recognition] is largely discretionary and turns on subjective factors that embody principles of comity.” (quoting In re Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., 389 B.R. 325, 333 (S.D.N.Y. 2008)) (second alteration in original); In re Sino-Forest Corp., 501 B.R.at 662 (“The relief granted in the foreign proceeding and the relief available in a U.S. proceeding need not be identical. A U.S. bankruptcy court is not required to make an independent determination about the propriety of individual acts of a foreign court. The key determination required by this Court is whether the procedures used in Canada meet our fundamental standards of fairness.” (quoting In re Metcalfe, 421 B.R. at 697); In re Avanti, 582 B.R. at 616 (“In deciding whether to grant appropriate relief or additional assistance under chapter 15, courts are guided by principles of comity and cooperation with foreign courts.”); see also In re Vitro S.A.B. de C.V., 701 F.3d 1031, 1060-62 (5th Cir. 2012) (noting that Section 1507 is meant to “provide relief not otherwise available under [the Bankruptcy Code or other] United States law”).

4 In re Metcalfe, 421 B.R. at 696 (“[P]rinciples of enforcement of foreign judgments and comity in chapter 15 cases strongly counsel approval of enforcement in the United States of the third-party non-debtor release and injunction provisions included in the Canadian Orders, even if those provisions could not be entered in a plenary chapter 11 case.”); In re Vitro, 701 F.3d at 1062 (noting that “although our court has firmly pronounced its opposition to such releases, relief is not thereby precluded under § 1507, which was intended to provide relief not otherwise available under the Bankruptcy Code or United States law”); In re Sino-Forest Corp., 501 B.R. at 663 (finding that “[s]imilar to Metcalfe,” approval of the third-party releases there “is proper as ‘additional assistance’ under section 1507 of the Bankruptcy Code”); In re Avanti, 582 B.R. at 618 (“The Court concludes that schemes of arrangements sanctioned under UK law that provide third-party non-debtor guarantor releases should be recognized and enforced under chapter 15 of the Bankruptcy Code.”).

5 In re Metcalfe, 421 B.R. 685.

6 Id. at 695 (citing In re Johns-Manville Corp., 517 F.3d 52 (2d Cir. 2008), rev’d and remanded sub nom. Travelers Indemnity Co. v. Bailey, 557 U.S. 137 (2009).

7 Id. at 696.

8 In re Sino-Forest Corp., 501 B.R. 655.

9 Id. at 665-66.

10 See id. at 662.

11 In re Avanti, 582 B.R. 603.

12 In re Vitro, 701 F.3d at 1065-69.

13 In re Avanti, 582 B.R. at 618-19.

14 Id. at 619.

15 See In re Sino-Forest Corp., 501 B.R. at 662 (“[T]he correct inquiry in a chapter 15 case [is] not whether the [foreign] orders [granting third-party releases] could be enforced under U.S. law in a plenary chapter 11 case, but whether recognition of the [foreign] courts’ decision was proper in the exercise of comity in a case under chapter 15” (citing In re Metcalfe, 421 B.R. at 696)).

16 In addition to the two cases detailed in this article, also see, for example, In re RongXingDa Dev. (BVI) Ltd., No. 22-10175 (DSJ) (Bankr. S.D.N.Y. Mar. 14, 2022) (recognizing, on certificate of no objection and without a hearing, British Virgin Islands scheme of arrangement containing third-party releases); and In re PT Pan Bros. Tbk, No. 22-10136 (MG) (Bankr. S.D.N.Y. Mar, 8, 2022) (recognizing nonmain proceeding regarding Singaporean scheme of arrangement and enforcing third-party releases under a deed of release).

17 See In re Purdue Pharma, L.P., No. 21-CV-7532-CM, 2021 WL 5979108, at *4 (S.D.N.Y. Dec. 16, 2021) (district court vacated the bankruptcy court’s order confirming the Purdue plan of reorganization and held that bankruptcy judges lack statutory authority to approve nonconsensual third-party releases of direct claims in Chapter 11 cases), appealed to 3d Cir, appealed to Supreme Court.

18 Hr’g Tr. at 18:23–19:10, In re Huachen Energy, Co., No. 22-10005 (LGB) (Bankr. S.D.N.Y. Feb. 1, 2022) (Huachen Hr’g Tr.).

19 Huachen Hr’g Tr. at 20:3–5; 20:20–21:3.

20 Huachen Hr’g Tr. at 20:13–15.

21 Skadden represented the foreign representatives of the CATCo Debtors in these Chapter 15 cases.

22 See Hr’g Tr. at 27:2–10, In re Markel CATCo Reinsurance Fund Ltd., No. 21-11733 (LGB) (Bankr. S.D.N.Y. 2022) (Enforcement Hr’g Tr.) (noting that the buyout transaction “was an interesting and unique way of dealing with a restructuring problem and one that actually I’m sure people will be interested in looking at, and perhaps utilizing the methodology in the future” and “does appear to be a well thought out and uncommon but creative use of various provisions in Bermuda law, as well as obviously just overall restructuring proceedings”).

23 Additionally, the CATCo Debtors’ parent covered the costs of the transaction so that such costs did not reduce the distributable amounts available to investors.

24 Judgment ¶ 87.

25 Enforcement Hr’g Tr. at 21:23–22:5.

26 Cf. In re PT Bakrie Telecom Tbk, 628 B.R. 859, 882-85 (Bankr. S.D.N.Y. 2021) (denying approval of third-party releases in this Indonesian restructuring plan where there was “no clear and formal record that sets forth whether or how the foreign court considered the rights of creditors when considering th[e] third-party release” there, and, as such, “relying on the [Indonesian] Commercial Court Judgment [approving the restructuring plan] is insufficient where it does not provide any justification for the release, either under Indonesian law or otherwise”).

27 Enforcement Hr’g Tr. at 22:22–23:1.

28 Enforcement Hr’g Tr. at 23:2-5.

29 Enforcement Hr’g Tr. at 22: 12–21.

30 Enforcement Hr’g Tr. at 22:6–11.

31 In re Crédito Real, S.A.B. de C.V., SOFOM, E.N.R., No. 25-10208 (TMH), 2025 WL 977967, at *1 (Bankr. D. Del. Apr. 1, 2025).

32 Id. at *2.

33 Id. at *2.

34 Id. at *2.

35 Id. at *4.

36 Id. at *2.

37 Section 1507 provides that, upon recognition of a foreign proceeding, the U.S. court may “may provide additional assistance to a foreign representative under this title or under other laws of the United States.” 11 U.S.C. § 1507(a). Similarly, Section 1521(a) provides that “upon recognition … the court may, at the request of the foreign representative, grant any appropriate relief, including – … (7) granting any additional relief that may be available to a trustee [subject to certain exceptions].” 11 U.SC. § 1521(a).

38 Section 1123(b)(6) of the Bankruptcy Code provides that a Chapter 11 plan may “include any other appropriate provision not inconsistent with the applicable provisions of [the Bankruptcy Code].” 11 U.S.C. § 1123(b)(6).

39 See In re Crédito Real, 2025 WL 977967, at *10.

40 Id.

41 Id. at *11.

42 Id. at *15.

43 Id.

44 Id.

45 In re Odebrecht Engenharia e Construção S.A. - Em Recuperação Jud., No. 25-10482 (MG), 2025 WL 1156607, at *1 (Bankr. S.D.N.Y. Apr. 21, 2025).

46 Id. at *2.

This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.

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