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In ‘363’ Sales, Three Courts Say Purdue Doesn’t Bar Injunctions Protecting Buyers

For a sale ‘free and clear,’ nondebtors can be enjoined from suing.

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Opinion Link

Case Details

Case Citation

In re Hopeman Brothers Inc., 24-32428 (Bankr. E.D. Va. Jan. 24, 2025)

Case Name

In re Hopeman Brothers Inc.

Case Type

Business

Comments

This is a fascinating twist! So insurance companies buy back their policies for an agreed upon amount under a 363 sale, that money is then used to fund a trust (or other distribution mechanism), and the insurer gets the releases of third party claims as a 363 protection. If this line of cases survives Supreme Court review (which I hope it does), this seems to clearly be a work around of the Purdue dilemma. Very clever.