Issue link: https://mbozikis.ufcontent.com/i/1422521
179 For example, certain courts, including courts in the Fifth, Ninth and Tenth Circuits, have flatly rejected the proposition that a third party may be granted a release on the grounds that Section 524(e) provides that a "discharge of a debt of a debtor does not affect the liability of any other entity . . . on such debt." See, e.g., Bank of N.Y. Trust Co. v. Official Comm. of Unsecured Creditors (In re Pac. Lumber Co.), 584 F.3d 229, 252 (5th Cir. 2009); In re Lowenschuss, 67 F.3d 1394, 1401 (9th Cir. 1995); Landsing Diversified Props.-II v. First Nat'l Bank & Trust Co. of Tulsa (In re W. Real Estate Fund, Inc.), 922 F.2d 592, 600 (10th Cir. 1990). Other courts have found that Section 524(e) does not prohibit the release of a nondebtor, but instead merely explains the effect of a debtor's discharge. For example, courts in the Second, Third, Fourth, Sixth and Seventh Circuits have permitted third party releases or injunctions in "unusual circumstances," although the standards differ somewhat among the circuits. See, e.g., Deutsche Bank AG v. Metromedia Fiber Network, Inc. (In re Metromedia Fiber Network, Inc.), 416 F.3d 136, 143 (2d Cir. 2005) (where court stated that "[a] nondebtor release in a plan of reorganization should not be approved absent the finding that truly unusual circumstances render the release terms important to success of the plan . . . ."); Gillman v. Cont'l Airlines (In re Cont'l Airlines), 203 F.3d 203 (3d Cir. 2000) (referring to certain "hallmarks of permissible non-consensual releases – fairness, necessity to the reorganization, and specific factual findings to support these conclusions . . . ."); In re A.H. Robins Co., Inc., 880 F.2d 694 (4th Cir. 1989) (where court-approved injunction of suits against certain nondebtor parties under facts of the case); In re Dow Corning Corp., 280 F.3d 648 (6th Cir. 2002) (where court stated that in unusual circumstances, an injunction of non-consenting creditor's claims against a third party to facilitate a Chapter 11 plan may be permissible); Airadigm Commc'ns, Inc. v. FCC (In re Airadigm Commc'ns, Inc.), 519 F.3d 640 (7th Cir. 2008). Recent high-profile cases in which non-consensual third party releases were granted have generated significant controversy and