Introduction

Non-consensual third-party releases are provisions in reorganization plans that release non-debtor parties from liability to other non-debtor parties without the consent of all potential claimholders. These releases are frequently included in chapter 11 plans of reorganization. Most circuit courts allow these releases under certain circumstances; however, there is a split among circuit courts as to whether such non-consensual third-party releases are permitted by the Bankruptcy Code.

Introduction

As Covid-19 restrictions in the UK gradually come to an end, the need for distressed tenants to be able to reorganise their liabilities to efficiently deal with the pandemic’s impact upon their balance sheets is likely to result in a number looking to use restructuring plans and CVAs.

Thankfully, a trio of significant recent cases, New Look1, Virgin Active2 and Regis3, have provided helpful and timely guidance regarding the use of such processes.

Beauty Brands, LLC, along with two subsidiaries and affiliates, has filed a petition for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 19-10031).

Angel Medical Systems, Inc., a developer of medical devices based in Eatontown, NJ, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Case No. 18-12903).

White Eagle Asset Portfolio, LP, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-12808).

Checkout Holding Corp. (dba Catalina Marketing), along with ten affiliates and subsidiaries, has filed a petition for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-12794).

interTouch Holdings LLC and its affiliate, interTouch TopCo LLC, have both filed petitions for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-12772).

Argos Therapeutics, Inc. (f/k/a Merix Bioscience, Inc.) has filed a petition for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Case No. 18-12714).

Fairway Energy, LP, along with two subsidiaries and affiliates, has filed a chapter 11 petition for relief in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-12684).