Prohibiting non-debtor releases in bankruptcy cases.
This bill aims to prevent courts from releasing non-debtor entities from claims in bankruptcy cases. This means states, municipalities, federally recognized Tribes, and the United States can continue to pursue claims against these related parties, potentially impacting how funds are recovered in large corporate bankruptcies.
Key points
The act prohibits courts from releasing non-debtor entities from claims, even if they are related to a bankruptcy case, for example, in large corporate bankruptcies.
States, municipalities, federally recognized Tribes, and the U.S. government can still pursue claims against these entities, increasing their chances of recovering funds.
Courts can only temporarily pause such actions for up to 90 days, allowing time for case organization.
Expired
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