District Court Confirms Nonconsensual Third-Party Releases Survive Purdue Pharma in Chapter 15

On March 31, 2026, US District Court Chief Judge Colm F. Connolly of the District of Delaware affirmed a bankruptcy court order recognizing Crédito Real, S.A.B. de C.V., SOFOM, E.N.R.’s (“Crédito Real”) Mexican concurso mercantil proceeding as a foreign main proceeding under Chapter 15 of the Bankruptcy Code, and granting full force and effect to the debtor’s concurso plan—including its nonconsensual third-party releases. This decision is the first appellate-level authority—a district court reviewing a bankruptcy court ruling—to hold that the Supreme Court’s landmark ruling in Harrington v. Purdue Pharma L.P. (“Purdue Pharma”), which struck down nonconsensual third-party releases in Chapter 11 plans, does not extend to the recognition and enforcement of restructuring plans under Chapter 15. This is consistent with the approach taken by the Bankruptcy Court for the Southern District of New York in Judge Martin Glenn’s decision in the Odebrecht Chapter 15 case.

This ruling reinforces the structural independence of Chapter 15 and its unique role within the larger framework of US bankruptcy law. In particular, it confirms that US bankruptcy courts retain broad discretion to enforce foreign restructuring plans containing releases that would not be available under domestic law, provided the foreign proceeding satisfies basic standards of procedural fairness and comity. For parties involved in cross-border restructurings, Crédito Real is a notable decision—one that may prompt debtors to pursue global restructurings through foreign insolvency regimes that allow such releases and then seek recognition and enforcement in the United States under Chapter 15.

The Purdue Pharma Decision

In June 2024, the Supreme Court issued its landmark decision in Purdue Pharma, holding that section 1123(b)(6) of the Bankruptcy Code, a “catch-all” provision permitting Chapter 11 plans to include “any other appropriate provision not inconsistent with the applicable provisions of this title,” does not authorize nonconsensual third-party releases as part of a Chapter 11 plan of reorganization. The Supreme Court’s analysis was highly textual in nature, relying on the canon of ejusdem generis to conclude that section 1123(b)(6) must be read in the context of its neighboring provisions, all of which concern the debtor and its direct obligations. The Supreme Court emphasized, however, that its holding was limited: “we hold only that the bankruptcy code does not authorize a release and injunction that, as part of a plan of reorganization under Chapter 11, effectively seeks to discharge claims against a nondebtor without the consent of affected claimants.” The Supreme Court further noted that Congress could authorize such releases, as it had already done in section 524(g) for asbestos-related cases.

While Purdue Pharma unambiguously ended the permissibility of nonconsensual third-party releases in Chapter 11 plans, its narrowly tailored statutory interpretation left open the issue of what influence, if any, Purdue Pharma has on Chapter 15 and a US bankruptcy court’s ability to grant comity to and enforce nonconsensual third-party releases contained in non-US restructuring plans.

The Crédito Real Case

Crédito Real was one of Mexico’s largest non-bank financial lending institutions, with customers predominantly located in Mexico, elsewhere in Latin America, and in the United States. Following a liquidity crisis in 2021 and years of litigation (including a prior Chapter 15 and involuntary Chapter 11 case), the company, an ad hoc group of unsecured creditors, and other stakeholders entered into a restructuring support agreement for a global restructuring through a Mexican concurso mercantil proceeding. The resulting concurso plan, which was approved by a majority of creditors and confirmed by the Mexican court, included a release of claims against certain non-debtors, including former officers, directors, and stakeholders. This release is customarily permitted under Mexican bankruptcy law.

In February 2025, Crédito Real’s foreign representative filed a petition seeking recognition of the concurso proceeding as a foreign main proceeding under section 1517 of the Bankruptcy Code and granting full force and effect to the concurso plan in the United States. The US International Development Finance Corporation (“DFC”), an unsecured creditor in the concurso proceeding, objected to enforcement of the plan in the Chapter 15 case, arguing that the nonconsensual third-party release violated US public policy in light of Purdue Pharma. On March 11, 2025, Delaware Bankruptcy Judge Thomas Horan overruled DFC’s objection and granted recognition and enforcement of the concurso plan, finding that Purdue Pharma's holding is “expressly limited to a Chapter 11 case” and that Chapter 11 and Chapter 15 are “very different animals.” DFC appealed to the district court.

The District Court’s Ruling

i. Purdue Pharma Does Not Apply to Chapter 15

On appeal, Chief Judge Connolly affirmed Judge Horan’s decision in full, rejecting each of DFC’s arguments. The Court held that the bankruptcy court did not err in declining to apply Purdue Pharma’s construction of section 1123(b)(6) to the Chapter 15 provisions at issue. DFC had urged the court to follow Purdue Pharma’s roadmap for interpreting the “catch-all” provisions of sections 1521(a)(7) and 1507, the statutory bases for Chapter 15 relief, in the same manner the Supreme Court interpreted section 1123(b)(6). The Court rejected this argument, citing the “fundamental structural and functional differences between Chapter 11 and Chapter 15.”
The Court emphasized several key distinctions. First, the catch-all provisions in Chapter 15 are part of a recognition and enforcement framework “drafted specifically to empower courts to assist foreign proceedings where appropriate,” rather than a domestic reorganization statute. Second, DFC failed to identify anything in the text of Chapter 15 comparable to section 1123(b)(6)’s requirement that plan provisions not be “inconsistent with the applicable provisions of this title”—a textual limitation central to the Supreme Court’s ruling in Purdue Pharma. The Court invoked the well-established canon of statutory construction that where Congress includes particular language in one section of a statute but omits it in another, the disparate inclusion or exclusion is presumed to be intentional. The Court concluded that Congress “designed Chapter 15 to allow courts to flexibly assist foreign proceedings in ways tailored to their specific legal and factual contexts, not to replicate the exact structure of Chapter 11.”

ii. Sections 1521(a) and 1507 Authorize the Relief

The Court found that enforcement of the concurso plan, including the release, was authorized under both sections 1521(a) and 1507 of the Bankruptcy Code. Section 1521(a) authorizes the court to grant “any appropriate relief” necessary to effectuate the purposes of Chapter 15, and section 1507 independently authorizes “additional assistance,” subject to specifically enumerated prohibitions that do not include third-party releases. The Court rejected DFC’s argument that because nonconsensual third-party releases are no longer available domestically in Chapter 11 cases post-Purdue Pharma, they must also be barred under Chapter 15, holding that section 1521(a)(7) “does not impose a requirement that the relief be presently available under Chapter 11.”

With respect to section 1507, the court reaffirmed that this provision reflects Congress’s intent to grant bankruptcy courts “broad discretion to recognize and assist foreign proceedings, even when the relief exceeds what is typically available under Chapter 11, so long as basic principles of comity, fairness, and US public policy are respected.” The Court found that refusing to recognize customary foreign restructuring tools like the release, “absent any fundamental conflict with US policy, would frustrate the statutory purpose of Chapter 15 and render section 1507 meaningless.”

iii. The Release is Not Manifestly Contrary to US Public Policy

The Court also rejected DFC’s argument that the release was “manifestly contrary” to US public policy under section 1506 of the Bankruptcy Code. The court emphasized the narrow scope of this exception, noting that it applies only “where the procedural fairness of the foreign proceeding is in doubt or cannot be cured by the adoption of additional protections” or where recognition “would impinge severely a US constitutional or statutory right.” DFC did not challenge the procedural fairness of the concurso proceeding, and the court found no basis to disturb the bankruptcy court's determination that the proceeding was “the product of a procedurally sound, transparent, and equitable restructuring process.”

The Court also noted that Purdue Pharma did not establish that nonconsensual third-party releases violate US public policy. Rather, the Supreme Court’s analysis focused on statutory interpretation under provisions of Chapter 11, not on public policy, and that such releases are permissible under section 524(g) in asbestos cases. The Court observed that the Supreme Court’s “acknowledgment of the policy arguments supporting such releases undermines DFC’s claim they are manifestly contrary to fundamental US policy.”

Impact

For parties navigating cross-border restructurings, this decision affirms that non-US plans containing third-party releases which are impermissible under US law can be enforced in the United States under Chapter 15. This may encourage debtors and creditor groups to structure global restructurings through non-US insolvency regimes that permit such releases, with subsequent enforcement in the United States via Chapter 15. Given the relative ease of establishing standing for Chapter 15 recognition and the breadth of relief available, the decision may accelerate a trend toward structuring restructurings offshore where release provisions are a critical component of the deal. Nevertheless, foundational aspects of the cross-border ancillary process—such as the determination of the debtor’s center of main interests—remain threshold issues that must be addressed in any Chapter 15 proceeding.

This decision also reinforces the narrow scope of the public policy exception under section 1506, confirming that mere differences between US and foreign law are insufficient to trigger this safeguard. Parties seeking to oppose enforcement of a non-US bankruptcy plan will need to demonstrate either a genuine threat to core US constitutional or statutory rights or a fundamental deficiency in the procedural fairness of the non-US proceeding.

¹ In re Odebrecht Engenharia e Construcao S.A. - Em Recuperacao Jud., 669 B.R. 457, 473 (Bankr. S.D.N.Y. 2025).

² Harrington v. Purdue Pharma L. P., 603 U.S. 204, 209-19 (2024).

³ Transcript 61, In re Credito Real, S.A.B. de C.V., SOFOM, E.N.R., No. 22-10630, (Bankr. D. Del. Mar. 11, 2025), Dkt. No. 238.

⁴ Opinion 14, U.S. Int’l Dev. Fin. Corp. v. Credito Real S.A.B. De C.V., SOFOM, E.N.R., No. 25-371, (D. Del. Mar. 31, 2026), Dkt. No. 30.