States Claim Sackler Family Members Are Abusing Bankruptcy Process
Settlement was reached in thousands of lawsuits against OxyContin maker Purdue Pharma for its role in opioid epidemic
WEDNESDAY, Dec. 1, 2021 (HealthDay News) -- A settlement that gives protections to Sackler family members who own Purdue Pharma should be rejected, a group of states told a federal judge on Tuesday.
The settlement was reached in thousands of lawsuits against OxyContin maker Purdue Pharma for its role in the U.S. opioid epidemic that has claimed more than 500,000 lives in the past two decades.
Sackler family members removed more than $10 billion from the company, directed the funds toward bankruptcy, and then used a settlement crafted in bankruptcy court to gain legal protections for themselves, Washington state Solicitor General Noah Purcell told U.S. District Judge Colleen McMahon, the Associated Press reported. "If that is not an abuse of the bankruptcy process," Purcell said, "it's unclear what would be.”
Under the deal approved in September by a federal bankruptcy judge, members of the Sackler family would contribute more than $4 billion, plus the company itself, to fight the opioid epidemic, the AP reported. In return, members of the family are to be protected from lawsuits accusing them of helping drive the opioid crisis, but they would not be shielded from criminal charges. They are not facing any at the moment, but a group of activists is urging federal authorities to bring charges against some of the Sackler family members.
By taking bigger distributions out of Purdue Pharma over the decade leading to the company's bankruptcy filings, Sackler family members "made themselves necessary" to the negotiations over the settlement, the AP reported. But lawyers for the family said the distributions were bigger because the company was making more money and that there is no evidence any of them were trying to manipulate the bankruptcy system.