On April 15, 2026, Judge Alfredo R. Pérez of the United States Bankruptcy Court for the Southern District of Texas confirmed the modified joint prepackaged Chapter 11 plan of Cumulus Media Inc. and its debtor affiliates at the conclusion of a 48-minute hearing in Houston. The U.S. Trustee for Region 7, Kevin Epstein, was the principal objector. His challenge targeted the plan’s third-party release mechanism, specifically, the use of an opt-out structure to bind non-consenting non-debtor parties to releases of claims against non-debtor third parties.

The Deal and the Release Structure

Cumulus filed for Chapter 11 on March 4, 2026, with a restructuring support agreement carrying support from holders of approximately 85% of its funded debt. The prepackaged plan reduces approximately $592 million in funded debt. Under the plan, holders of approximately $168.6 million in allowed 2029 secured claims receive 95% of the reorganized company’s new common equity along with $50 million in exit convertible notes. Holders of other funded debt claims, encompassing 2026 notes, 2026 term loans, and 2029 deficiency claims totaling roughly $494.5 million, receive the remaining 5%. Existing equity is wiped out. Emergence is conditioned on FCC approval of the transfer of Cumulus’s broadcast licenses.

The plan’s third-party release used a hybrid consent mechanism. For holders of claims in Classes 1 through 6, the release operated on an opt-out basis: those who did not affirmatively check a box on the applicable form were deemed to have consented. For holders of existing equity interests in Class 9, however, the plan required affirmative opt-in; no Class 9 holder became a releasing party without timely returning a Release Opt In Form. This distinction matters for the post-Purdue debate, because it means the plan did not rely on silence as consent across the board.

The U.S. Trustee’s Objection and Judge Pérez’s Ruling

Epstein challenged the opt-out structure on the now-familiar ground that silence is not consent and that Harrington v. Purdue Pharma L.P., 603 U.S. 204 (2024), foreclosed non-consensual non-debtor third-party releases as a matter of statutory law. The objection also argued that state contract law, rather than federal common law, governs whether a creditor has actually agreed to release claims, taking direct aim at Judge Jones’s earlier ruling in In re Container Store Group from the same district, which had upheld opt-out releases under a federal common law theory.

Judge Pérez overruled the objection and confirmed the plan. The ruling tracks the line that the Southern District of Texas and a number of other courts have taken since Purdue: that a properly disclosed opt-out structure, supported by conspicuous notice and overwhelming creditor support, can generate the kind of consent Purdue reserves. On this view, the question is not whether non-debtor releases are categorically foreclosed, but whether the opt-out mechanism produces consent of the kind the statute requires.

Why This Matters

I have noted in prior posts that the post-Purdue landscape on consent remains deeply unsettled. In the Southern District of New York, Judge Cote’s December 2025 district court opinion in In re GOL Linhas Aereas Inteligentes S.A., the first district court ruling to overturn a bankruptcy court’s approval of an opt-out release, and related decisions in cases like In re Spirit Airlines have made the SDNY a markedly less hospitable forum for opt-out structures. The same plan provision can yield very different outcomes depending on the courthouse.

For practitioners in Delaware, Cumulus is a useful data point on the question of whether the opt-out approach can survive vigorous opposition from the U.S. Trustee. It plainly can, at least where the court is satisfied that disclosure was conspicuous, voting was strong, and the release does not extend further than the deal warranted. Whether the same record would persuade the Delaware bench is an open question. What seems unlikely to change is that the U.S. Trustee will continue to press the point. Until a circuit court resolves what Purdue leaves intact, opt-out third-party releases will remain the central confirmation battleground in negotiated prepackaged restructurings.