The Diocese of Buffalo, N.Y.
Bond, Schoeneck & King, PLLC
Stephen A. Donato, Esq., Charles J. Sullivan, Esq.,
Grayson T. Walter, Esq., Brendan M. Sheehan, Esq., of counsel
One Lincoln Center
Syracuse, New York 13202-1355
Attorneys for The Diocese of Buffalo, N.Y.
Pachulski Stang Ziehl & Jones LLP
Ilan D. Scharf, Esq., James I. Stang, Esq.,
Iain A.W. Nasitir, Esq., Karen B. Dine, Esq., of counsel
780 Third Avenue, 34th Floor
New York, New York 10017
Attorneys for Official Committee of Unsecured Creditors
Office of the U.S. Trustee
Joseph W. Allen, Esq., Jill M. Zubler, Esq., of counsel
Olympic Towers
300 Pearl Street, Suite 401
Buffalo, New York 14202
Steve Boyd, PC
Stephen Boyd, Esq., of counsel
2969 Main St., Suite 100
Buffalo, New York 14214
Attorneys for Various Claimants
Lipsitz Green Scime Cambria
Amy C. Keller, Esq., of counsel
42 Delaware Avenue, Suite 120
Buffalo, New York 14202
Attorneys for Various Claimants
Woods Oviatt Gilman LLP
Timothy P. Lyster, Esq., of counsel
1900 Bausch & Lomb Place
Rochester, New York 14604
Co-Counsel for Parish Steering Committee
On February 27, 2026, this Court issued a decision holding that a reorganization plan in Chapter 11 can release claims against third parties only with the express consent of affected creditors. We found that the mere opportunity to “opt-out” of a settlement cannot suffice to establish such acquiescence. See In re Diocese of Buffalo, N.Y., ___ B.R. ___, 2026 WL 585099 (Bankr. W.D.N.Y 2026). Both the Official Committee of Unsecured Creditors (the “Committee“) and the Diocese of Buffalo, N.Y. (the “Diocese” or “Debtor“) now move for reconsideration. Alternatively, the Committee requests authorization to take an expedited appeal to the Court of Appeals and proposes the issuance of guidelines for a “pre-packaged” plan of reorganization. Meanwhile, the Debtor requests an extension of time to file an amended disclosure statement and plan.
We incorporate by reference our opinion of February 27, inasmuch as it recites the relevant facts and reasoning of the Court. In support of their motions for reconsideration, the Debtor and Committee direct our attention to two recent decisions, both of which implied consent from a failure to opt-out of a proposal for third-party releases. See In re Container Store Group, Inc., __ B.R. __, 2026 WL 395898 (S.D.Tex. 2026) and In re Lutheran Home and Services for the Aged, Inc., __ B.R. __, 2026 WL 626606 (Bankr. N.D.Ill. 2026). Unquestionably, these rulings confirm the existence of divergent views. We respect these other opinions, but are persuaded more by the reasoning of those cases that have insisted that creditors opt-in to proposals for a release of third parties. Nothing in the motions for reconsideration
Although this Court will not change its ruling on requirements for consent, the split of authority suggests a need for appellate review. In the aftermath of the Supreme Court‘s decision in Harrington v. Purdue Pharma L.P., 603 U.S. 204 (2024), trial courts have operated without the benefit of controlling precedents on this issue. Consequently, we accept the Committee‘s request for an expedited appeal to the Second Circuit Court of Appeals.
In the Second Circuit, bankruptcy appeals are normally presented first to the District Court and only then to the Court of Appeals. See
“The appropriate court of appeals shall have jurisdiction of appeals described in the first sentence of subsection (a) if the bankruptcy court . . . acting on its own motion or on the request of a party to the judgment, order, or decrees described in such first sentence . . . certify that-
- the judgment, order, or decree involves a question of law as to which there is no controlling decision of the court of appeals for the circuit or of the Supreme Court of the United States, or involves a matter of public importance;
- the judgment, order, or decree involves a question of law requiring resolution of conflicting decisions; or
- an immediate appeal from the judgment, order, or decree may materially advance the progress of the case or proceeding in which the appeal is taken;
and if the court of appeals authorizes the direct appeal of the judgment, order, or decree.”
Here, a direct appeal is warranted under all of the alternative grounds stated in the statute. The requirements of consent have yet to be resolved by either the Court of Appeals or the Supreme Court. Indeed, in Purdue Pharma, 603 U.S. at 226, the Supreme Court chose not “to express a view on what qualifies as a consensual release.” Moreover, as shown by the exigencies of the present case, the issue of consent is a matter of public importance. A direct appeal is further justified by the conflicting decisions that Bankruptcy Courts have rendered in this circuit and across the country. Additionally, a decision on any appeal would materially advance the progress of this case, which has already been open for more than six years. Otherwise, we face the prospect of multiple layers of appeal that might cause even greater delay.
In our decision of February 27, we agreed with the view of District Judge Cote that “outside of rare exceptions, consent cannot be implied from silence.” In re GOL Linhas has Aereas Inteligentes S.A., 675 B.R. 125, 131 (S.D.N.Y. 2025). Her ruling is now under appeal to the Second Circuit. An expedited appeal by the Diocese and Committee may also allow an opportunity for the Circuit to review the decision of this Court at the same time that it examines the similar matter that it has under consideration.
No matter how we set the requirements for consent, the Debtor might wish to consider other options for the release of claims against third parties. In particular, the Diocese of Buffalo identifies a need to resolve claims that are being asserted not only against the Debtor, but also against affiliated entities such as parishes. In conjunction
In its Decision and Order of February 27, this Court directed the Debtor and Committee to file a first amended disclosure statement and plan by March 31, 2026. The Diocese now seeks an extension of this deadline. The anticipated appeal may delay the final approval of consent procedures, but that is no reason to defer the consideration of other issues. Whether they incorporate an “opt-in” or “opt-out” approach, a revised disclosure statement and plan will provide a framework for review. Our goal is to address other open disputes, so that upon completion of the appellate process, we might proceed more promptly toward confirmation. In response to the Court‘s question, counsel for the debtor stated that they could provide revised documents by June 1. Finding that this timetable falls within a range of reasonable expectation, we will now direct the filing of an amended disclosure statement and plan by that date.
Conclusion
The motions for reconsideration of the Decision and Order of February 27, 2026, are denied. However, for the reasons stated herein, this Court certifies grounds for a
So ordered.
Dated: April 3, 2026
Buffalo, New York
/s/ Carl L. Bucki
Hon. Carl L. Bucki, Chief U.S.B.J., W.D.N.Y.