The Supreme Court on Thursday blocked a bankruptcy settlement for opioid manufacturer Purdue Pharma that would have given the Sackler family immunity from lawsuits over their role in the opioid crisis.
Under the settlement, the Sacklers agreed to provide $6 billion to address the opioid crisis as part of the terms approved by the U.S. bankruptcy trustee. Claimed It was an “exceptional and unprecedented” release from future lawsuits. In Harrington v. Purdue Pharma, the justices ruled 5-4 that “the Bankruptcy Code does not permit discharges and injunctive relief that, as part of a Chapter 11 reorganization plan, effectively discharge claims against non-debtors without the consent of the affected claimants.”
“In this case, the Sacklers are seeking what amounts to a discharge even though they have not filed for bankruptcy or committed all of their assets for distribution to creditors. No provision in the Code allows for such relief,” the majority ruled.
Purdue Pharma filed for bankruptcy in 2019 after facing thousands of lawsuits over deceptive marketing that downplayed the addictive nature of its drug OxyContin. Purdue Pharma pleaded guilty in 2019 to criminal charges related to the company's misleading marketing. 2007 and again 2020.
As the crisis grew over the 11 years leading up to the bankruptcy filing, the Sacklers Withdrew The company has withheld about $11 billion, according to court documents.
the U.S. Bankruptcy Trustee, a Department of Justice office that oversees bankruptcy cases; Claimed The settlement “allows the Sacklers to protect billions of dollars in assets while eliminating, without payment, claims alleging trillions of dollars in damages” and frees them “from claims based on fraud and other willful misconduct that could not have been discharged had the Sacklers themselves filed for bankruptcy.”
However, 95% of victims Voted In support of settlement, the victims' groups wrote in their amicus briefs: I got it. This overwhelming majority came about because the plan was “the only viable mechanism to provide victims with the help they need, and need now.”
The justices heard oral arguments on the plan in December.
STAMFORD, CONNECTICUT – APRIL 2: Purdue Pharma headquarters stands in downtown Stamford, Connecticut on April 2, 2019. (Photo by Drew Ungerer/Getty Images)
In May 2023, the Second Circuit Court of Appeals Supported “Bankruptcies are inherently the product of conflicts of interest, compromises and less-than-perfect outcomes,” he said of the plan previously approved by the bankruptcy court.
A 2017 review of grants by the Daily Caller News Foundation found that charities linked to the Sacklers gave large amounts of money to the arts, humanities and sciences but did not give to organizations focused on fighting the opioid crisis.
The DCNF also investigated dozens of opioid addiction treatment centers but did not find the “Sackler” name, other than in blog posts and information pages mentioning the family's ties to Purdue, OxyContin and opioid addiction.
This is breaking news and will be updated.
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