In August, the U.S. Supreme Court halted a bankruptcy plan for Purdue Pharma while it reviews a challenge to the legality of the plan, agreeing to hear oral arguments this December.
Last week, Glenn Agre filed an amicus curiae brief in the Supreme Court on behalf of bankruptcy law professors Ralph Brubaker, Bruce A. Markell, and Jonathan M. Seymour, addressing the question of whether a bankruptcy court can approve nonconsensual nondebtor release provisions. This is the second brief filed in the matter on behalf of the group of law professors.
The brief reiterates the question of whether a bankruptcy court can endorse these nonconsensual nondebtor release provisions. It urges the Supreme Court to overturn the decision made by the U.S. Court of Appeals for the Second Circuit. It also argues that the Supreme Court should put an end to the unconstitutional practice of nonconsensual third-party releases, which both infringe on the separation-of-powers limitation of the Constitution’s Bankruptcy Clause and violate claimants’ due process rights and the right to jury trial and final judgment from an Article III court.
In the brief, the professors argue that “Granting Congress the power to provide for discharge of indebtedness is what motivated the Founders’ inclusion of the Bankruptcy Clause in the Constitution. Moreover, there is no common-law discharge power.” The group also states that “In the entirety of Anglo-American jurisprudential history, bankruptcy discharge has always been authorized solely by statute. Consequently, the Constitution explicitly provides that ‘Congress shall have Power...[t]o establish...uniform Laws on the subject of Bankruptcies.’”
Read the full brief here.