GOL Linhas Aereas Inteligentes S.A. and Gol Finance (Luxembourg)
24-10118
Bankr. S.D.N.Y.May 22, 2025Background
- GOL Linhas Aéreas and affiliates filed Chapter 11 on Jan. 25, 2024; Debtors proposed a plan (the Plan) that included settlements and extensive third‑party releases, an exculpation, and an injunction to enforce those releases.
- The Plan was supported by major stakeholders (Abra, the UCC, exit financiers) and provided significant recoveries to unsecured creditors via a global settlement (the PSA); solicitation ballots included an opt‑out mechanism for third‑party releases.
- The United States Trustee (UST) objected, narrowing its challenge to two issues at confirmation: (1) whether the Plan improperly imposes nonconsensual third‑party releases and whether opt‑outs can constitute consent; and (2) whether the Plan’s injunction (to enforce releases) is permissible.
- The Court concluded (after testing notice, voting results, and the Plan record) that: federal law governs consent to releases; consensual third‑party releases may be part of a plan under §1123(b)(6); opt‑out ballots can evidence consent when notice and circumstances are adequate; and an injunction enforcing releases is permissible when releases affect the res.
- The Court overruled the UST’s objections, found the Plan satisfied §1129, and confirmed the Plan.
Issues
| Issue | Plaintiff's Argument (UST) | Defendant's Argument (Debtors) | Held |
|---|---|---|---|
| Whether third‑party releases in a Chapter 11 plan are governed by state contract law or federal bankruptcy law | State law controls; releases are separate contracts and opt‑outs/silence do not equal consent under state contract principles | Federal law governs; §1123(b)(6) permits consensual third‑party releases as plan provisions | Federal law governs; consensual third‑party releases may be included in plans under §1123(b)(6) (Purdue does not bar consensual releases) |
| Whether opt‑out ballots can manifest creditor consent to third‑party releases | Opt‑outs are insufficient; silence cannot be treated as consent under state contract doctrines | Opt‑out mechanism can evidence consent if notice is clear, prominent, and circumstances support implied consent | Opt‑outs can evidence consent if notice is constitutionally adequate and consent is knowing and voluntary (applying Roell/Wellness standard and case‑specific factors) |
| Whether the bankruptcy court may issue an injunction to enforce releases between non‑debtors | Court lacks authority and post‑confirmation jurisdiction to bar claims between non‑debtors; injunction not authorized by Code | Injunction is a narrow enforcement mechanism tied to the Plan; court has related‑to jurisdiction because releases are integral to the Plan and affect the res | Injunction is proper to enforce consensual releases where the releases affect the res and the court has related‑to jurisdiction; courts retain power to enforce confirmation orders |
| Whether the Plan otherwise satisfies §1129 (settlement, fairness, voting) | — (UST limited to release/injunction issues at confirmation) | Settlements are fair under Rule 9019/Iridium factors; voting and financing satisfy plan conditions | Plan meets §1129 requirements; confirmation approved and UST objection overruled |
Key Cases Cited
- Harrington v. Purdue Pharma L.P., 603 U.S. 204 (U.S. 2024) (held nonconsensual third‑party releases cannot be included in plans but expressly left consensual releases intact)
- United States v. Energy Res. Co., 495 U.S. 545 (U.S. 1990) (recognized that plan provisions under §1123(b) can affect creditor–nondebtor relationships)
- Wellness Int’l Network, Ltd. v. Sharif, 575 U.S. 665 (U.S. 2015) (Article III adjudication is a personal right subject to knowing and voluntary waiver; applied implied‑consent framework for bankruptcy adjudication)
- Roell v. Withrow, 538 U.S. 580 (U.S. 2003) (established that consent to adjudication may be implied from actions or inaction when party was aware of right to refuse)
- Quigley Co. v. City of New York (In re Quigley Co.), 676 F.3d 45 (2d Cir. 2012) (bankruptcy jurisdiction extends to third‑party claims that directly affect the res of the estate)
- Drexel Burnham Lambert Grp., Inc., 960 F.2d 285 (2d Cir. 1992) (bankruptcy courts may enjoin creditors from suing third parties when the injunction is important to the reorganization plan)