Yesterday, the Second Circuit overturned Judge McMahon’s December 2021 decision rejecting the Purdue Pharma bankruptcy on the grounds that the Bankruptcy Code did not permit releases of third-party direct claims against non-debtors. As we previously covered, Judge McMahon’s opinion found that the bankruptcy court lacked authority to issue releases in favor of the Sackler family. 

While acknowledging that both sides put forth arguments “about fairness and accountability, particularly as it relates to the Sacklers, in releasing parties from liability for actions that cause great societal harm” the Second Circuit concluded that the only questions it needed to resolve were (1) whether the Bankruptcy Code permits nonconsensual third-party releases of direct claims against non-debtors, and (2) if so, were such releases proper here in light of all equitable considerations and the facts of this case. The Court answered both questions in the affirmative:Continue Reading Second Circuit, Reversing Judge McMahon’s Order, Affirms Purdue Pharma Bankruptcy

Judge McMahon issued a written Order on Friday, answering the parties’ questions ahead of a bench trial in an ERISA case, and, in doing so, offered helpful guidance as to her practices in bench trials.

First, she was clear she does not want opening statements, and perhaps not even closing statements:Continue Reading Judge McMahon Ahead of Bench Trial: “Last Thing I Need Is Opening Statements”

In an Order Monday, Judge McMahon chided a group of defendants for “asking for permission to file almost everything in support of their motion for summary judgment and motions to exclude testimony of plaintiff’s various experts under seal.”

Referring to the required confidentiality stipulation “addendum” in her Individual Practices — which states “that confidentiality stipulations are abused by parties and that much material that is not truly confidential is designated as such” — Judge McMahon directed the defendants to instead evaluate confidentiality with a more careful, line-by-line approach:
Continue Reading Judge McMahon: “Most” Discovery Designated Confidential is Not; Oral Argument on Summary Judgment “Rarely” Necessary

In an opinion Monday, Judge McMahon denied a motion by Blackberry and certain former executives for summary judgement in a securities class action. In the same ruling, she denied Blackberry’s motion to strike the plaintiffs’ Rule 56.1 statement, which allegedly contained improper legal arguments instead of factual responses.  Judge McMahon criticized the motion as “pointless”

In an opinion yesterday, Judge McMahon vacated the Purdue Pharma bankruptcy settlement because she found that the bankruptcy court lacked authority to issue releases in favor of the Sackler family.  (See our previous coverage here.) The family members had “offered to contribute toward a settlement, but if—and only if—every member of the family could ‘achieve global peace’ from all civil (not criminal) litigation, including litigation by Purdue to claw back the money that had been taken out of the corporation.”

But Judge McMahon concluded that there was no authority in the bankruptcy law for those releases. This is an issue that has been the subject of “long-standing conflict among the Circuits that have ruled on the question,” with no clear answer yet from the Second Circuit.

Among the reasons that Judge McMahon cited for siding with the Circuits that have refused to find authority for third party releases is the fact that Congress in 1994 authorized third-party releases in the specific context of asbestos, with the Judiciary Committee noting: “How the new statutory mechanism works in the asbestos area may help the Committee judge whether the concept should be extended into other areas.” This statement suggested to Judge McMahon that a broader authority to issue third-party releases in “other areas” did not exist in the first place, particularly given that Congress has not acted on the question since:
Continue Reading Judge McMahon: Bankruptcy Court Lacked Authority to Release Sackler Family as Part of Purdue Settlement

In an order yesterday in the appeal of the Purdue Pharma bankruptcy case, Judge McMahon invited briefing, due Monday at 9:00 a.m., on whether the Sackler family, which contributed $4.5 billion to the Purdue estate in exchange for releases, abused the bankruptcy system by distributing excessive profits to themselves in the years immediately prior to the bankruptcy:
Continue Reading Judge McMahon Asks for Briefing on Whether Purdue Pharma’s Profit Distributions to Sackler Family Were “Abusive”

Earlier today, the Attorney General of the State of New York brought an action to “end the pervasive use of excessive force and false arrests” by the NYPD in “suppressing overwhelmingly peaceful protests” following the police killings of George Floyd and Breonna Taylor. According to the complaint:

From May 28, 2020 to December 11, 2020, NYPD Officers of various ranks (“NYPD Officers”) repeatedly and without justification used batons, fist strikes, pepper spray, and other physical force against New York Residents at the Protests. Protesters—many of whom were never charged with any crime and were merely exercising their First Amendment rights—suffered concussions, broken bones, cuts, bruises, and other physical injuries.

Continue Reading New York State Sues New York City Over NYPD Response to Police Brutality Protests