As the U.S. Supreme Court prepares to consider a challenge by President Joe Biden’s administration to the legality of Purdue Pharma’s bankruptcy settlement, a contentious deal shielding the Sackler family from lawsuits over their involvement in the opioid epidemic, high-stakes debate looms in Washington.
The settlement, which would grant Purdue’s wealthy Sackler family members immunity in exchange for up to $6 billion to settle thousands of lawsuits, has sparked a legal battle that has made its way to the nation’s highest court.
The case centers on whether U.S. bankruptcy law allows Purdue’s restructuring to extend legal protections to Sackler family members who have not filed for personal bankruptcy, a move the Biden administration has condemned as a misuse of the bankruptcy system.
The bankruptcy settlement, approved by a U.S. bankruptcy judge in 2021, is estimated to provide $10 billion in value to creditors, but has faced vehement opposition from the administration and eight states. The 2nd U.S. Circuit Court of Appeals upheld the settlement in May, ruling that such legal protections for non-bankrupt parties like the Sacklers were warranted in extraordinary circumstances.
The Sackler family has denied wrongdoing, maintaining that they did not anticipate OxyContin’s contribution to the opioid epidemic, and have emphasized that the settlement will provide significant resources for those affected. However, the administration has alleged that the Sackler family members withdrew $11 billion from Purdue before agreeing to contribute $6 billion to the opioid settlement, which has added fuel to the contentious legal debate.
Supporters of the settlement, including a group of over 60,000 people with personal injury claims linked to Purdue opioid products, have urged the Supreme Court to uphold the deal, emphasizing that billions of dollars in abatement and victim compensation funds are contingent on the settlement’s confirmation and consummation.
The upcoming Supreme Court hearing on the Purdue Pharma bankruptcy settlement reflects a growing debate over the intersection of corporate liability, bankruptcy law, and the opioid crisis, as the nation grapples with widespread opioid addiction and its devastating consequences.
(Reporting by John Kruzel and Andrew Chung; Editing by Will Dunham)
