Restructure This! Episode 9: Is it Time to Prohibit Non-Consensual Third-Party Releases in Bankruptcy Proceedings?
Sheppard Mullin’s Restructure THIS! podcast explores the latest trends and controversies in Chapter 11 bankruptcy, commercial insolvency, and distressed investing. For this episode, Ralph Brubaker, the James H.M. Sprayregen Professor of Law at the University of Illinois College of Law, joins us to discuss the use of non-consensual third-party releases in bankruptcy proceedings.
Professor Brubaker holds four degrees from the University of Illinois, including his J.D. summa cum laude and an M.B.A. He was on the faculty of Emory University School of Law in Atlanta, Georgia, from 1995 until 2004, when he returned to his alma mater. Professor Brubaker served as Interim Dean of the College of Law from 2008-09 after serving as Associate Dean of Student Affairs the previous two years.
Considered one of the leading bankruptcy scholars of his generation, Professor Brubaker is the Editor-in-Chief and a contributing author for West’s Bankruptcy Law Letter. He is also co-author of a bankruptcy casebook and has written dozens of journal articles and essays. In his most recent article, "Mandatory Aggregation of Mass Tort Litigation in Bankruptcy,” published last month in the Yale Law Journal Forum, Professor Brubaker addressed the inequities of non-consensual third-party releases used in bankruptcy proceedings and argued for their prohibition.
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What We Discussed in This Episode:
- What are non-consensual third-party releases as they relate to bankruptcy proceedings?
- Why are these types of releases controversial?
- Should these types of releases be prohibited rather than reformed?
- Are there third-party releases that should be permitted in Chapter 11 plans?
- Why aren’t claimant opt-out mechanisms a sufficient indicator of consent?
- Is there a critical mass of consent that could bind a non-consenting minority?
- Does the population of claimants subject to non-consensual third-party releases matter?
- Could prohibiting these releases impair the efficient resolution of the bankruptcy and reorganization process?
This podcast is for informational and educational purposes only. It is not to be construed as legal advice specific to your circumstances. If you need help with any legal matter, be sure to consult with an attorney regarding your specific needs.