Ending Corporate Shielding: Non-Debtors Remain Liable to Government Claims.
This law prevents bankruptcy courts from automatically releasing related individuals or entities (non-debtors) from liability claims brought by state, local, or federal governments. This ensures that public entities can continue to sue responsible parties for damages, even if the main corporation files for bankruptcy. The goal is to increase accountability for owners and executives involved in public harm cases.
Key points
State, federal, and local governments retain the right to sue individuals and related companies that did not file for bankruptcy.
Bankruptcy courts are prohibited from releasing these non-debtors from public claims without their consent, increasing financial accountability.
Courts may only temporarily pause such lawsuits for a maximum of 90 days to manage the bankruptcy process.
Expired
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