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US HR4777

US HR4777
Nondebtor Release Prohibition Act of 2021


summary

Introduced
07/28/2021
In Committee
11/03/2021
Crossed Over
Passed
Dead
01/03/2023

Introduced Session

117th Congress

Bill Summary

A BILL To amend title 11, United States Code, to prohibit non- consensual release of a nondebtor entity’s liability to an entity other than the debtor, and for other purposes.

AI Summary

This bill, the Nondebtor Release Prohibition Act of 2021, amends the United States Bankruptcy Code to prohibit courts from approving the discharge, release, termination, or modification of the liability of an entity other than the debtor or the bankruptcy estate. It also allows for appeals of orders temporarily staying or enjoining the enforcement of claims against non-debtors. Additionally, the bill requires the dismissal of a bankruptcy case if the debtor was involved in a divisional merger or similar transaction within the previous 10 years that had the intent or effect of separating material assets from liabilities and assigning those liabilities to the debtor. The bill clarifies that it does not independently grant the court authority to issue non-debtor releases, injunctions, or stays in bankruptcy proceedings.

Committee Categories

Justice

Sponsors (7)

Last Action

Ordered to be Reported (Amended) by the Yeas and Nays: 23 - 17. (on 11/03/2021)

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