Delaware District Court Affirms Enforcement Of Nonconsensual Releases Under Chapter 15

In re Crédito Real S.A.B. de C.V., SOFOM, E.N.R., 677 B.R. 192 (D. Del. 2026)

The United States District Court for the District of Delaware (the District Court) recently affirmed an order of the Delaware Bankruptcy Court granting recognition and enforcement of a Mexican restructuring plan that contained nonconsensual third-party releases. We previously covered recent Chapter 15 cases enforcing nonconsensual third-party releases, including the Bankruptcy Court’s decision in Crédito Real, here. The full text of the District Court’s decision is accessible here.

Why this case matters

This case is the latest in a series of cases — and potentially the first decision by a district court after the Supreme Court’s decision in Harrington v. Purdue Pharma L.P., 603 U.S. 204 (2024) (Purdue) — holding that nonconsensual releases approved in foreign restructuring proceedings can be enforced in the United States under Chapter 15. 

In 2024, the U.S. Supreme Court held that nonconsensual third-party releases were impermissible (in most circumstances) under a Chapter 11 plan. However, several bankruptcy courts in recent Chapter 15 proceedings have enforced nonconsensual third-party releases approved in foreign restructurings — meaning that foreign debtors are able, through Chapter 15, to obtain and enforce in the United States relief through Chapter 15 that they may not be able to obtain in Chapter 11.

Holding

The District Court held that:

1. Sections 1521(a) and 1507 of the Bankruptcy Code provide broad authority to recognize and enforce a restructuring plan approved by a foreign court that contains nonconsensual releases;
2. The U.S. Supreme Court’s bar on nonconsensual third-party releases under Chapter 11 in Purdue does not restrict Chapter 15’s recognition and enforcement provisions;
3. Comity dictates that Chapter 15 be interpreted broadly to accommodate varied international restructuring mechanisms; and 
4. Section 1506’s public policy exception is a narrow remedy, exercised when core U.S. constitutional or statutory rights are at stake.

Factual background

In 2021, one of Mexico’s largest nonbank financial lending institutions, Crédito Real, failed. A corporate liquidation proceeding was filed in the 52nd Civil State Court of Mexico City (the Mexican Court); certain unsecured creditors separately filed an involuntary Chapter 11 petition in the Southern District of New York. After years of litigation, the parties entered into a Restructuring Support Agreement pursuant to which the debtor’s Mexican restructuring plan (the Plan) contained “customary” non-debtor releases, releasing the ad hoc group of unsecured creditors and certain of the debtor’s advisers, representatives and stakeholders, in accordance with Mexican law (the Releases). The Plan was approved by the requisite majority of creditors and confirmed by the Mexican Court (the Confirmation Order).

The United States International Development Finance Corporation (DFC) objected to the Plan, but the Plan was approved over its objection. On appeal in Mexico, DFC raised for the first time that the Releases violated Mexican Bankruptcy Law. As of the date of the decision, the appeal remained pending.

Crédito Real’s foreign representative then filed a petition for recognition of the Mexican Proceeding under Chapter 15 in the Bankruptcy Court for the District of Delaware (the Bankruptcy Court), seeking (i) recognition of the Mexican Proceeding as a foreign main proceeding and (ii) enforcement of the Plan and Confirmation Order. DFC filed a limited objection asserting that the Releases violated U.S. public policy.

The Bankruptcy Court overruled DFC’s objection, recognized the Mexican Proceeding as the foreign main proceeding, and granted recognition and enforcement of the Plan and Confirmation Order.

The District Court’s analysis

The District Court largely concurred with the Bankruptcy Court’s reasoning and concluded that the Bankruptcy Court had broad authority to enforce a foreign court’s order granting nonconsensual third-party releases. The Bankruptcy Court’s decision was accordingly affirmed.

Chapter 15’s purpose

The District Court relied on the policy statement of Chapter 15 as set forth in Section 1501(a), which includes facilitating cooperation between U.S. and foreign courts, and providing legal certainty for trade and investment. 11 U.S.C. § 1501(a). The District Court also noted “Congress’s intent for courts to interpret Chapter 15’s provisions broadly to accommodate various international legal systems and restructuring mechanisms.” In re Crédito Real, 677 B.R. at 200 (D. Del. 2026). As part of that analysis of comity, the District Court emphasized the importance of a single restructuring plan being able to bind all creditors in a single proceeding. Id. With these policy and background reasons in mind, the Court proceeded to consider the plain text of the relevant Chapter 15 provisions.

Chapter 15’s text

The District Court agreed with the Bankruptcy Court that the plain text of Chapter 15 grants U.S. courts sufficient authority to recognize and enforce nonconsensual releases.

Purdue does not apply to Chapter 15

In Purdue, the U.S. Supreme Court interpreted Section 1123(b)(6) of the Bankruptcy Code as not granting the Bankruptcy Court authority to approve nonconsensual third-party releases under a Chapter 11 plan. Here, both the Bankruptcy Court and the District Court held that this limitation did not apply to the additional relief available in Chapter 15 under Sections 1507 and 1521 because (i) Purdue’s holding was limited only to Chapter 11 cases and (ii) Chapter 15 does not include provisions similar to Section 1123(b)(6)’s language requiring plan provisions to be “not inconsistent with the applicable provisions of [Title 11].” 11 U.S.C. § 1123(b)(6). The District Court agreed that Chapter 15 grants bankruptcy courts much wider authority.

Enforcement was authorized under Sections 1521(a) and 1507 of the Bankruptcy Code

The District Court concluded that Section 1521(a), which allows the Bankruptcy Court to grant “‘any appropriate relief’ necessary to effectuate the objectives of Chapter 15,” permitted enforcement of a foreign restructuring plan containing nonconsensual releases. Id. at 203. Contrary to DFC’s suggestion, the District Court refused to restrict its authority under Section 1521(a)(7) only to “any additional relief that may be available to a trustee” in Chapter 11 proceedings. Id. at 202. It held that Section 1521(a)(7) expands the Bankruptcy Court’s authority and the availability of a particular relief under Chapter 11 is not a prerequisite for the court to grant other relief under Chapter 15.

The District Court also recognized that the Bankruptcy Court correctly evaluated that all requirements of Section 1507(b) were met, with “[c]omity [as the] guiding statutory principle.” Id. at 204. The District Court concluded that the Bankruptcy Court had sufficient discretion to grant assistance, including additional assistance, under Chapter 15. Id. at 203-04.

Releases not “manifestly contrary” to US public policy

Finally, the District Court disagreed with DFC’s argument that enforcing the Releases was contrary to U.S. public policy, holding that mere discrepancies between foreign and domestic law did not meet the high threshold of Section 1506’s public policy exception. Only “genuine threats to core U.S. constitutional and statutory rights” would meet that bar. Id. at 205. But the court found that Congress has authorized nonconsensual third-party releases in asbestos cases under Section 524(g) of the Code, and further that while nonconsensual third-party releases may not otherwise be available in Chapter 11, “Congress may [still] authorize them.” Id. “The Supreme Court’s acknowledgment of the policy arguments supporting such releases undermines DFC’s claim they are manifestly contrary to fundamental U.S. policy.” Id. 

What next?

As we previously reported, each bankruptcy court in a Chapter 15 proceeding asked to recognize and enforce a nonconsensual third-party release post-Purdue has found that such releases are permitted and enforceable in the Chapter 15 context.

However, as these cases work their way through the appellate courts, we may see a circuit split emerge along the lines of the pre-Purdue circuit split on bankruptcy court’s authority to grant third-party releases under Chapter 11. Before Purdue, the Fifth and Ninth Circuits did not permit nonconsensual third-party releases under a Chapter 11 plan, whereas the Second and Third Circuits did. The issue of enforcement of nonconsensual third-party releases under Chapter 15 seems to be heading in the same direction.

In In re Vitro S.A.B. de C.V., 701 F.3d 1031 (5th Cir. 2012), the Fifth Circuit denied enforcement of nonconsensual third-party releases contained in a plan approved by a foreign (Mexican) court — invoking the same Chapter 15 provisions, Sections 1507 and 1521, that the District Court relied on in Crédito to reach the opposite result. This holding, while distinct in certain of its particulars, is thus arguably in tension with Crédito and other similar cases.

While there is no post-Purdue circuit split on this issue yet, bankruptcy practitioners should closely monitor how Chapter 15 jurisprudence evolves with respect to enforcement of nonconsensual third-party releases.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.