Elizabeth Warren Seeks to Block ‘Two-Step’ Bankruptcy Move (1)

Sen. Elizabeth Warren (D-Mass.) has reintroduced legislation to rein in a controversial bankruptcy maneuver and prevent nonbankrupt entities from using Chapter 11 to skirt liability.

Warren introduced the Nondebtor Release Prohibition Act of 2024 on Wednesday.

The bill, S. 5415, would prohibit nonconsensual litigation shields in bankruptcy plans for people and entities that aren’t bankrupt, codifying what the high court banned in its 5-4 decision in Harrington v. Purdue Pharma. The justices in June rejected Purdue’s $6 billion bankruptcy settlement, ruling against liability releases for members of the billionaire Sackler family who own the pharmaceutical ...