On December 1, 2025, the U.S. District Court for the Southern District of New York issued a decision in In re GOL Linhas Aéreas Inteligentes S.A., 675 B.R. 125 (S.D.N.Y. 2025), reversing a bankruptcy court’s confirmation of third-party releases that relied on an opt-out mechanism. Judge Denise Cote held that a creditor’s silence—a failure to affirmatively opt out of a release—does not constitute consent under general principles of contract law, and that the releases were therefore nonconsensual and barred under the Supreme Court’s decision in Harrington v. Purdue Pharma L.P., 603 U.S. 204 (2024). The decision contributes to an emerging and significant split in how federal courts are interpreting the permissibility of third-party releases in the post-Purdue era.
Background
GOL Linhas Aéreas Inteligentes, a major Brazilian domestic low-cost airline, filed for Chapter 11 in the Southern District of New York on January 25, 2024, carrying approximately $4.1 billion in outstanding debt. The debtors proposed a plan of reorganization incorporating third-party releases. Recognizing that Purdue had prohibited nonconsensual releases outright while expressly reserving the question of what constitutes a consensual release, the plan proponents adopted an opt-out mechanism. Under this approach, creditors and claimants received notice of the release language and were deemed to consent unless they affirmatively opted out by checking a box on a ballot or opt-out form by a specified deadline.
The voting data proved notable. Of the 688 ballots mailed to eligible creditors, 63 were returned as undeliverable. Of the 617 creditors who returned ballots, more than half—323—chose to opt out of the third-party release. Among the 2,603 non-voting creditors sent Notices of Non-Voting Status with attached opt-out forms, only 14 returned the forms, and 11 of those 14 checked the opt-out box. The Bankruptcy Court (Chief Judge Martin Glenn) nonetheless overruled the U.S. Trustee’s objection and confirmed the plan, concluding that the releases were consensual under federal law because the creditors had impliedly consented by consenting to the bankruptcy court’s jurisdiction.
The District Court’s Analysis
On appeal, Judge Cote reversed. In a notable analytical move, the court declined to resolve the choice-of-law dispute that had consumed much of the parties’ briefing—whether federal or state contract law governs the consent inquiry. Citing Second Circuit precedent that a choice-of-law analysis is unnecessary absent an actual conflict, the court held that the same general principles of contract law apply under both federal and New York state law, and that under those principles, the opt-out releases were nonconsensual.
The court’s reasoning drew on foundational contract law principles. Under the Restatement (Second) of Contracts and consistent New York and Second Circuit authority, silence generally does not constitute acceptance of an offer. The court found that the creditors had no duty to respond to the opt-out opportunity, no contemporaneous oral agreement existed, and the debtors failed to establish that any recognized exception to the silence rule applied. An opt-out mechanism, while arguably more protective than a purely nonconsensual release, still imposes consent by default and shifts the burden to parties to protect their own interests. This approach, the court concluded, does not satisfy the consent requirement that Purdue demands.
The court also rejected three additional arguments advanced by the debtors. First, the debtors argued that creditors who consent to a bankruptcy court’s jurisdiction thereby consent to any release the court may approve in a plan. The court found this to be an unsupported logical leap, noting that jurisdictional consent does not extend to substantive consent to waive claims. Second, the debtors attempted to import opt-out class action principles from Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985), but the court observed that Shutts addressed personal jurisdiction over class members and that the procedural protections of Rule 23 were not present here. Third, the debtors analogized to default judgments, but the court noted that default judgments are entered when parties have a duty to respond—a duty the creditors here lacked.
Why This Matters
The GOL decision contributes to the growing uncertainty surrounding third-party release practice in the post-Purdue era. While the Supreme Court was decisive on one point—nonconsensual releases are not authorized under the Bankruptcy Code—it expressly declined to define what qualifies as a consensual release. Courts across the country have begun to diverge on whether opt-out mechanisms satisfy Purdue‘s implicit consent requirement. The SDNY’s skepticism toward opt-out releases signals that practitioners cannot assume deemed consent mechanisms will pass muster in all jurisdictions. Debtors and plan proponents must prepare for a range of approaches: in some courts, opt-out releases may be permissible; in others, only affirmative opt-in consent will suffice.
In my view, this fragmentation creates significant planning challenges for large, complex reorganizations that necessarily implicate third-party claims. But it may also incentivize negotiated settlements and genuine consensus-building among key constituencies, rather than reliance on procedural defaults. The decision also underscores that the voting data itself—where the majority of responding creditors opted out—can undercut the argument that silence should be treated as consent. As more cases work through the federal courts, additional clarity may emerge through further appellate review or the gradual development of a more coherent approach among the circuits.