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Abstract: 

The availability of non-consensual third-party releases has drawn companies facing mass tort liability into bankruptcy courts with increasing regularity. For these companies, bankruptcy’s offer of non-consensual third-party releases — by which an entire corporate enterprise may be relieved of all tort claims, both present and future — may affect a “truly global peace.” However, the Supreme Court is expected to rule this year on the permissibility of non-consensual third-party releases in Harrington v. Purdue Pharma L.P. Should the Court deem non-consensual third-party releases impermissible, “truly global peace” may no longer be possible. Yet, as recent MDL settlements make clear, “nearly global peace” — with virtually universal participation in consensual releases — is possible without bankruptcy and provides a substantial benefit to those who contribute to the settlement. The driver for these consensual settlements is the same as a key element for obtaining non-consensual third-party releases in bankruptcy: adequate valuation of tort liability. Thus, irrespective of the outcome in Purdue, claim valuation will remain a critical component of any resolution of mass tort liability, whether in or out of bankruptcy.

Keywords: Non-Consensual Third-Party Releases; Harrington v. Purdue Pharma L.P.; Multi-District Litigation (“MDLs”)

Affiliations:  1: Otterbourg P.C.; 2: Otterbourg P.C.; 3: Otterbourg P.C..