Third-party releases in a post-Purdue world: Grupo Hima’s guidance on consent and due process

The Past: The Supreme Court’s Rejection of Non-Consensual Third-Party Releases

In Harrington v. Purdue Pharma L.P., 603 U.S. 204 (2024) (Purdue Pharma), the Supreme Court held that the Bankruptcy Code does not authorize a release and injunction that, as part of a Chapter 11 plan, effectively discharges claims against a non-debtor without the consent of affected claimants. The Court expressly preserved consensual third-party releases and left the contours of consent unresolved. Since the issuance of that decision, bankruptcy courts have grappled with how to structure consensual third-party releases. In doing so, courts have focused in part on Sections 1123(b)(6) and 105(a) of the Bankruptcy Code, which address appropriate plan provisions and orders necessary or appropriate to carry out the Code.

The Present: Grupo Hima in the Post-Purdue Pharma Case Law

The Bankruptcy Court recently confirmed a Chapter 11 plan in In re Grupo Hima San Pablo, Inc., No. 23-02510 (ESL), 2026 WL 2492194 (Bankr. D.P.R. Aug. 24, 2026) (Grupo Hima), a decision that adds the District of Puerto Rico to the post-Purdue Pharma discussion of consensual third-party releases. Grupo Hima San Pablo, Inc. and its affiliated entities (collectively, Debtors) sought to incorporate third-party releases into their Plan. The Plan used an opt-out mechanism: creditors who filed electronic appearances, were represented by counsel or were duly notified and received copies of the Plan and ballot were deemed to consent unless they opted out. Creditors who voted to accept the Plan were deemed to have consented even if they chose to fill out an opt-out form.

The Parties’ Arguments

The United States Trustee for Region 21 (US Trustee) objected to confirmation. Its core argument was that the opt-out mechanism improperly treated silence as affirmative consent, contrary to Purdue Pharma; that consent should be assessed under Puerto Rico law rather than federal law; and that, under Puerto Rico law, silence cannot constitute consent in these circumstances. The US Trustee further argued that a settlement agreement (i.e., the Plan) must be consensual, in writing and supported by mutual concessions, and that a creditor’s vote on a plan addressing claims against the Debtors does not supply unambiguous assent to releases of claims against non-debtors. It also argued that the exculpation provisions were overbroad and that the injunction provisions amounted to a prohibited discharge. The US Trustee advocated an affirmative opt-in process, separate from the plan vote, for any third-party release.

The Debtors responded that federal law—not Puerto Rico law—governs whether a creditor consents to a third-party release in a Chapter 11 plan. They argued that In re GOL Linhas Aéreas Inteligentes S.A., 675 B.R. 125 (S.D.N.Y. 2025), rev’d, 672 B.R. 129 (Bankr. S.D.N.Y. 2025), a case cited by the US Trustee as persuasive authority, was distinguishable because it applied New York law, and that the Bankruptcy Code’s text and structure support the application of a federal rule. In the alternative, the Debtors argued that even if state law applied, Puerto Rico law recognizes forms of tacit or implied consent in certain circumstances; the result, they contended, would therefore be the same. The Debtors also emphasized that the Plan and solicitation materials provided clear notice and straightforward methods for creditors to opt out.

The Court’s Decision

The Bankruptcy Court addressed three related questions: (1) whether federal or state law governs the consent inquiry; (2) whether the Plan’s opt-out process provided valid consent; and (3) whether the Plan’s exculpation and injunction provisions were valid and necessary to implement the restructuring.

On the first question, the Bankruptcy Court held that federal law governs. It relied on the strong federal interest in uniform administration of Chapter 11 plans and on Sections 1123 and 105 of the Bankruptcy Code. Section 1123(b)(6) permits a plan to include appropriate provisions not inconsistent with the Code, while Section 105(a) authorizes orders necessary or appropriate to carry out the Code. Quoting Epstein v. The Container Store Group Inc. (In re Container Store Grp., Inc.), 676 B.R. 356, 374 (S.D. Tex. 2026), the Bankruptcy Court explained that federal interests may require federal law where state law might otherwise govern. It further quoted Container Store for the proposition that “a bankruptcy court’s authority to enter consensual third-party releases is a matter of federal law” because that authority follows from the Code’s “text and structure,” raising federal-law questions including “what it means to agree.” 676 B.R. at 378, 382. The Bankruptcy Court therefore concluded that whether a creditor consented to a plan-based third-party release is a question of federal law.

The Bankruptcy Court recognized the post-Purdue Pharma split over opt-out mechanisms. In the Southern District of New York and District of Delaware, certain cases approved opt-outs where clear drafting and prominent disclosure demonstrated meaningful consent, while others rejected them or otherwise expressed skepticism. Courts in the Southern District of Texas, by contrast, have more often than not approved opt-out mechanisms after examining the facts of each case. See, e.g., In re Robertshaw US Holding Corp., 662 B.R. 300, 323 (Bankr. S.D. Tex. 2024). The court also noted that the First Circuit has not directly addressed what constitutes consent to a third-party release. Grupo Hima therefore adds the District of Puerto Rico, at least at the bankruptcy-court level, to the jurisdictions approving opt-out mechanisms under federal law.

Against that backdrop, the Bankruptcy Court held that, under federal law, consent may be established through an opt-out mechanism when affected parties receive clear, conspicuous notice and a meaningful opportunity to decline. The court tied that analysis to due process principles requiring notice reasonably calculated to apprise interested parties of the action and afford them an opportunity to object. See Paging Network, Inc. v. Nationwide Paging, Inc. (In re Arch Wireless, Inc.), 534 F.3d 76, 83 (1st Cir. 2008), quoting Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950). With those protections in place, the failure to opt out reflects a meaningful choice rather than mere inaction.

Applying that standard, the Bankruptcy Court found the solicitation record persuasive. The ballots contained multiple prominent warnings in boldface about the releases, reproduced the full release provisions, and explained the consequences of failing to opt out. Non-voting creditors received a separate Notice of Non-Voting Status and Opt-Out Form. The opt-out process was simple: checking a clearly marked box, and creditors were told expressly that opting out would not affect their distributions. Twenty-nine parties validly opted out, demonstrating that the mechanism worked in practice. All impaired voting classes overwhelmingly accepted the Plan, and no creditor objected to the releases at confirmation. The Bankruptcy Court treated these facts as evidence that creditors received clear, adequate notice and a meaningful opportunity to decline, and held the third-party releases consensual and enforceable.

The Bankruptcy Court also gave an independent alternative holding. Even if state law governed, it concluded that the result would be the same. Citing Rivera-Colon v. AT&T Mobility Puerto Rico, Inc., 913 F.3d 200 (1st Cir. 2019), the Bankruptcy Court explained that Puerto Rico law permits consent to be implied through inaction when the circumstances create a reasonable expectation that a person would speak if they did not agree. Because the Plan clearly disclosed that rights would be affected absent action and provided a meaningful opportunity to respond, the Bankruptcy Court concluded that silence could reasonably be construed as consent under Puerto Rico law. This alternative analysis supplies an important second line of support where a state-law challenge is likely.

The Bankruptcy Court separately upheld the exculpation and injunction provisions as valid and essential components of the Plan. It found the exculpation appropriately tailored to conduct undertaken in connection with the Plan and restructuring process, with carve-outs for fraud, willful misconduct and gross negligence. It found the injunction necessary to implement and enforce the Plan, limited to claims, interests and causes of action treated under the Plan, and compliant with the Federal Rules of Bankruptcy Procedure because it clearly and conspicuously described the acts to be enjoined and the entities subject to the injunction. These holdings are important for deal structuring because they confirm that protections for parties helping fund, negotiate and administer a restructuring can be integral to a workable plan when appropriately tailored.

What Grupo Hima Means for Practitioners

Grupo Hima offers a practical drafting playbook for consensual third-party releases. Debtors and plan proponents should use clear, prominent boldface warnings; reproduce the full text of the operative release provisions in the ballot; provide a simple, clearly marked checkbox opt-out; send a separate opt-out notice and form to non-voting creditors; and state expressly that opting out will not change the creditor’s distributions. Counsel should also preserve a clear record of delivery, creditor understanding, opt-out elections and voting results. These procedures are not merely presentational: they create the evidentiary record supporting a finding that a creditor made a meaningful choice rather than remain silent.

The federal law holding is particularly significant in jurisdictions where state contract law may be less hospitable to implied consent. It gives plan proponents a basis to argue that consent in the Chapter 11 context should be evaluated under the Bankruptcy Code’s text, structure and federal objectives rather than imported wholesale from state contract law. The issue remains unsettled, however: the Southern District of New York and Delaware have produced divergent decisions, and the First Circuit itself has not directly ruled on what constitutes consent to a third-party release. Grupo Hima therefore adds the District of Puerto Rico to the jurisdictions approving opt-out mechanisms under federal law, but it does not eliminate the broader split.

For lenders and DIP financing parties, the decision is especially relevant because the Plan included the prepetition secured parties, the DIP agent, and the DIP lender among the parties protected by the releases, and the court upheld related exculpation and injunction protections as essential to implementation. Those stakeholders should seek appropriately tailored protections early in the case and pair them with solicitation procedures robust enough to support informed, consensual participation. The favorable holding in Grupo Hima should be used as a guide for disciplined process—not as a substitute for one.

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