In a previous article “Third-Party Releases? – Not So Fast!”, members of the Lowenstein team wrote regarding the changing trends and heightened scrutiny of nonconsensual third-party releases across jurisdictions in a post-Enron world. At the time that article was published, three circuits–the Fifth, Ninth, and Tenth Circuits–had been labeled “Prohibition Circuits,” that is, those that generally held nonconsensual third-party releases are barred by the Bankruptcy Code without exception. The remaining jurisdictions, labeled “Permissive Circuits,” generally permitted nonconsensual third-party releases under certain conditions set forth by case law within the circuit. Although none of the circuits entirely switched perspectives over the past five years, courts have been active and vocal in this area, and parties have been creative in finding new ways to present these releases to the court. This article examines significant case law updates, as well as common pitfalls which practitioners should be aware of when analyzing “release” issues on behalf of their clients.

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