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The Nondebtor Release Prohibition Act of 2024 restricts bankruptcy courts from releasing non-debtor entities from liability without their explicit written consent. The bill prevents courts from discharging, releasing, or modifying the legal obligations of third parties or their assets in bankruptcy cases, and blocks courts from stopping lawsuits against entities that are not the bankruptcy debtor. The legislation applies to all bankruptcy cases filed on or after enactment and to cases already pending, though it does not affect final orders issued before the law takes effect. The bill includes limited exceptions for court-approved asset sales, claims involving indemnity or subrogation, and situations where non-debtors give clear, signed consent to release of their claims. Additionally, the legislation imposes a 90-day limit on temporary stays or injunctions affecting non-debtors' claims in Chapter 11 reorganization cases unless a court of appeals affirms the order, and requires dismissal of bankruptcy cases involving divisional mergers designed to separate assets from liabilities.

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