A nonconsensual third-party release approved by a Mexican court can be enforced in the United States under Chapter 15 of the Bankruptcy Code, even after the Supreme Court’s 2024 decision in Harrington v. Purdue Pharma LP cast doubt on such releases in domestic cases. That’s the upshot of a March 31, 2026, opinion by Chief Judge Colm F. Connolly of the US District Court for the District of Delaware, affirming Bankruptcy Judge Thomas Horan’s April 2025 decision recognizing the Mexican insolvency proceedings of Crédito Real S.A.B. de C.V.
The Road to Restructuring
Crédito Real was once one of Mexico’s largest non-bank financial lenders. Then came a severe liquidity crisis in 2021. Initial restructuring talks failed. A shareholder launched a corporate liquidation proceeding in Mexico. An ad hoc group of unsecured creditors filed an involuntary Chapter 11 petition in the Southern District of New York. A related Chapter 15 case followed in Delaware.
After years of litigation and much negotiation, the company and its key stakeholders entered into a restructuring support agreement (RSA) that resolved these parallel proceedings and provided for a voluntary ‘Concurso Proceeding,’ a corporate reorganization under Mexican law, which commenced in October 2023. The RSA contemplated that the resulting plan would contain “customary releases and exculpation provisions” in accordance with Mexican law.
The Concurso Plan included a broad release of claims against several categories of non-debtors (shareholders, the former general manager, the liquidator, directors, officers, and The Bank of New Mellon as trustee) for any act or omission incurred during or prior to the bankruptcy proceeding. The Release did contain an exception: acts or omissions that caused damage to the Bankruptcy Estate and were not disclosed to creditors during negotiations.
These kinds of releases are customary in Mexican settlement agreements and fully permitted under Mexican bankruptcy law. The requisite majority of creditors approved the plan, and the Mexican Court confirmed it, finding that “neither the public interest nor the individual interest of any specific creditor is violated, since the terms agreed to will apply to all creditors equally.”
The DFC’s Challenge
The United States International Development Finance Corporation (DFC), a US government agency and a claimant in the proceedings, appealed the Bankruptcy Court’s March 2025 order granting the foreign plan full force and effect. The DFC didn’t contest that the Concurso Proceeding qualified as a “foreign main proceeding” under Bankruptcy Code §1517(a). It didn’t challenge the fairness or adequacy of the proceeding. Its sole objection was the nonconsensual third-party release.
The DFC leaned heavily on the Supreme Court’s 2024 decision in Harrington v. Purdue Pharma LP, arguing that it dictated that a bankruptcy court lacks statutory authority to approve nonconsensual third-party releases. The agency also contended that enforcing such a release was “manifestly contrary to the public policy” of the United States.
Chapter 15 Is Not Chapter 11
Judge Connolly rejected the DFC’s arguments squarely, zeroing in on the structural and functional differences between Chapter 11 and Chapter 15. The DFC, the court observed, failed to identify anything in Chapter 15 comparable to §1123(b)(6)’s requirement that plan provisions not be “inconsistent with the applicable provisions of this title.” Citing Russello v. United States, the court noted that when Congress includes limiting language in one section of a statute but omits it in another, the omission is presumed intentional. Had Congress intended to condition Chapter 15 relief on Chapter 11’s rules, it would have said so.
Purdue Pharma, the court clarified, addressed statutory interpretation within the narrow context of Chapter 11 domestic reorganization plans. It doesn’t apply to Chapter 15. Unlike Chapter 11, Chapter 15 incorporates the Model Law on Cross-Border Insolvency and is meant to be interpreted with “maximum flexibility” to promote international comity and cooperation with foreign courts.
Under Bankruptcy Code §§1521(a) and 1507, US courts have broad discretion to provide “any appropriate relief” and “additional assistance” to foreign representatives in cross-border insolvencies. Congress deliberately left out the restrictive language found in Chapter 11, opting instead to let courts flexibly assist foreign proceedings on their own terms.
The Public Policy Defense Goes Nowhere
The court also dispatched the public policy argument. The exception under Bankruptcy Code § 1506 is extremely narrow, applying only in “exceptional circumstances” where a foreign action offends the “most fundamental policies of the United States.” No one identified fraud, bad faith, or misconduct in the Mexican proceeding. That alone made the defense a steep climb.
Moreover, the court said, a conflict between foreign law and US law, standing alone, isn’t enough to trigger the exception. And Purdue Pharma itself didn’t establish that nonconsensual third-party releases violate US public policy. The Supreme Court’s analysis was limited to statutory interpretation under Chapter 11, and it expressly acknowledged that Congress may authorize such releases as it has, for example, in Bankruptcy Code §524(g) for asbestos-related cases.
The court found the Mexican Concurso Proceeding procedurally sound, transparent, and equitable. Creditors received comprehensive protections: an independent examiner, personal notification to all known creditors, a formal claims reconciliation process with objection rights, public access to all proceedings and documents, a creditor vote with a 50% approval threshold, oversight by Mexico’s IFECOM (Federal Institute of Insolvency Specialists), an opportunity to be heard, and meaningful judicial review (including appeal rights that the DFC had in fact exercised).
The release itself was the product of arm’s-length negotiations and was approved by the Mexican Court only after a hearing set on five business days’ notice to all parties in interest.
The bottom line: US bankruptcy courts can give effect to foreign orders under Chapter 15 even when those orders contain relief, like nonconsensual third-party releases, that would be unavailable under domestic law. Refusing to recognize customary foreign restructuring tools would frustrate the very purpose for which Chapter 15 was designed.
Stated differently, Chapter 15 ≠ Chapter 11; it’s a different animal entirely, built for comity, not constraint. And when a foreign proceeding checks the boxes–fair process, creditor protections, judicial oversight– US courts are likely to respect it, as they should, even if the outcome wouldn’t fly domestically (see what I did there?).
