Title: SACKLER Act
Policy area: Finance and Financial Sector

Summary:
Stop shielding Assets from Corporate Known Liability by Eliminating non-debtor Releases Act or the SACKLER Act
This bill prohibits a bankruptcy court from releasing claims against non-debtors brought by states, tribes, municipalities, or the federal government. However, the bankruptcy court may issue a stay not exceeding 90 days regarding such a claim.
Complex bankruptcies may involve creditor claims against non-debtors associated with the debtor, such as the debtor's officers, directors, or employees. Currently, in carrying out a bankruptcy plan, certain courts may release non-debtors from liability (there is a circuit split regarding this practice).

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 2472 Introduced in Senate (IS)]

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117th CONGRESS
  1st Session
                                S. 2472

      To prohibit the non-consensual release of claims by States, 
   municipalities, federally recognized Tribes, or the United States 
              against non-debtors, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 26, 2021

 Mr. Blumenthal (for himself and Ms. Warren) introduced the following 
    bill; which was read twice and referred to the Committee on the 
                               Judiciary

_______________________________________________________________________

                                 A BILL


 
      To prohibit the non-consensual release of claims by States, 
   municipalities, federally recognized Tribes, or the United States 
              against non-debtors, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Stop shielding Assets from Corporate 
Known Liability by Eliminating non-debtor Releases Act'' or the 
``SACKLER Act''.

SEC. 2. NON-DEBTOR RELEASES.

    (a) Prohibition on Certain Non-Debtor Releases.--Section 105(b) of 
title 11, United States Code, is amended by striking ``a court may 
not'' and all that follows, and inserting the following: ``a court may 
not--
            ``(1) appoint a receiver in a case under this title; or
            ``(2) except as provided by section 524(g) of this title, 
        enjoin or release a claim against a non-debtor by a State, 
        municipality, federally recognized Tribe, or the United 
        States.''.
    (b) Temporary Stay on Actions Against Non-Debtors.--Section 105 of 
title 11, United States Code, is amended by adding at the end the 
following:
    ``(e) Notwithstanding subsection (b)(2), a court may issue an order 
staying, for a period not to exceed 90 days, the commencement or 
continuation, including the issuance or employment of process, of a 
judicial, administrative, or other action or proceeding by a State, 
municipality, federally recognized Tribe, or the United States against 
a non-debtor that was or could have been commenced before the 
commencement of the case under this title, or to recover a claim 
against a non-debtor that arose before the commencement of the case 
under this title.''.
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