Davis Polk partner and Restructuring practice co-head Marshall Huebner discussed trends and developments in the bankruptcy and restructuring litigation space with Corporate Disputes as part of the publication’s October-December 2024 issue.

Marshall highlighted that the most important development in U.S. bankruptcy litigation in the last year was the Supreme Court decision in Purdue Pharma’s chapter 11 bankruptcy case. A 5-4 court decided that third-party releases are categorically unavailable under the bankruptcy code absent new legislation – no matter how salutary, widely supported, or beneficial to help resolve difficult cases. Marshall added that in addition to materially changing chapter 11 practice, this ruling will also spawn substantial follow-on litigation, including with respect to already consummated plans and provisions found in many reorganization plans. 

Marshall also discussed circumstances that tend to lead to bankruptcy litigation, tactics creditors are deploying to recover as much value as possible, ways to reach a positive outcome in bankruptcy disputes, structural possibilities and limitations of bankruptcy laws, and how he expects the bankruptcy litigation space to develop over the coming months.

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