SACKLER Act

Bill: 117-s-2472
Sponsor: full_name: Sen. Blumenthal, Richard [D-CT]
Introduced: 2021-07-26
Policy area: Finance and Financial Sector
Subjects: Bankruptcy

Corporate finance and management

Judicial procedure and administration

Specialized courts
Latest action: action_date: 2021-07-26
text: Read twice and referred to the Committee on the Judiciary.

Summaries:
action_date: 2021-07-26
action_desc: Introduced in Senate
text: <p><strong>Stop shielding Assets from Corporate Known Liability by Eliminating non-debtor Releases Act or the SACKLER Act </strong></p> <p>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.</p> <p>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).</p>

tv_txt: II 117th CONGRESS 1st Session S. 2472 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.

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 . 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. .