In a highly anticipated decision issued last Thursday (on December 19, 2019), the United States Court of Appeals for the Third Circuit held in In re Millennium Lab Holdings II, LLC that a bankruptcy court may constitutionally confirm a chapter 11 plan of reorganization that contains nonconsensual third-party releases. The court considered whether, pursuant to the United States Supreme Court’s decision in Stern v. Marshall, 564 U.S. 462 (2011), Article III of the United States Constitution prohibits a bankruptcy court from granting such releases.

The Insolvency Act 1986 makes provision for, amongst other things, bankruptcy and Debt Relief Orders.

When a person is made bankrupt, his property vests in the trustee in bankruptcy. Some items, however, are excluded from the estate, including any assured or secure tenancy (s283). Once a bankruptcy order has been made, no creditor in respect of a debt provable in the bankruptcy may have any remedy against the property of the bankrupt 'in respect of that debt' (s285(3)(a)).