As the Seventh Circuit has recently made clear in Airadigm Communications, Inc. v. FCC, bankruptcy courts have the discretion under Bankruptcy Code §524 to approve a release contained in a Plan of Reorganization of a party which did not seek bankruptcy protection. Such a non-debtor release is more likely to be approved by the bankruptcy court where the creditors do not object to the confirmation of the Plan or vote to approve the Plan. The adverse affect of such a release on a creditor’s ability to pursue a non-debtor guarantor or other obligor of the debtor’s debt, whether it is a corporate or individual guarantor, is obvious. Therefore, in the event one of your customers files for bankruptcy and attempts to discharge through a release included in a Plan or otherwise its debts to your organization but a third-party is also liable to your organization with respect to the same debt as a result of a guaranty or some other legal obligation, you should closely review the proposed Plan to make sure the debtor is not attempting to over-reach by including in the release/discharge of its general debts the debts of third-parties. Otherwise, you may find that your customer’s bankruptcy filing has also foreclosed your ability to pursue third-party obligors such as guarantors.