Members of Purdue Pharma’s billionaire Sackler family are fully immune from all current and future civil legal claims over their role in the company’s prescription opioid business, a federal appeals court panel said Tuesday. was sentenced to
The ruling gives families the full protection they have long sought in exchange for up to $6 billion in payments from their fortunes to combat the ongoing scourge of the opioid crisis.
This funding, along with the company’s initial spending of $500 million, will support addiction treatment and prevention programs, a need that has surged during the pandemic, far beyond the abuse of OxyContin, Purdue’s leading prescription pain reliever. It can begin to be distributed to states and communities as soon as possible.
Unless a successful appeal to the Supreme Court (which legal experts say is unlikely), the new ruling opens the door to Purdue’s hotly contested bankruptcy restructuring that began nearly four years ago. will be closed. The bankruptcy is central to plans to resolve thousands of opioid lawsuits against the company across the country, as well as approximately 400 opioid lawsuits against individuals in the Sackler family.
According to plans, Purdue will be reorganized into a new organization with the following name: Noah Pharma The company will manufacture medicines for addiction recovery and treatment, as well as continue to manufacture other medicines containing OxyContin. It will be overseen by a public commission. Over time, Knoah Pharma is expected to contribute at least hundreds of millions of dollars to plaintiffs.
Some officials who closely followed the Purdue case argued that the ruling sue Purdue for its early and active role in marketing OxyContin as a non-addictive pain medication. He praised the ruling, praising it as a realistic interpretation that could spare billions of dollars in damages to municipalities, tribes and individuals. .
“It’s time to forget about this bankruptcy. Victims have been waiting too long to recover,” said Ryan Hampton, an advocate for opioid victims and former co-chair of the Purdue Board of Creditors. said Mr.
“The system is far from perfect, but any further delay in reconciling the victims would be a real injustice,” he added.
But some said the Sacklers received an important pass. “Bankruptcy was never meant to be an alternative justice system for powerful corporations and their ultra-rich owners. It’s the effect and perception when you read it,” said Melissa B. Jacoby, a law professor at the University of North Carolina at Chapel Hill.
A bankruptcy filing typically suspends litigation, including litigation, against a company’s creditors. The main problem with the lawsuit is that the Sacklers did not file for bankruptcy as individuals, even though the city of Purdue did. As a result, plaintiffs opposing the plan argued that Sacklers should not benefit from its own liability protections.
Sacklers resigned from Purdue’s board in 2018 and has not been directly involved with the company since.
Judge Eunice C. Lee of the U.S. Court of Appeals for the Second Circuit, who wrote Tuesday’s opinion to the three-judge panel, said bankruptcy law requires business owners who have not filed for bankruptcy to meet certain conditions. It has found that it is entitled to liability protection under situation.
“Bankruptcy is essentially a creature of conflicts of interest, compromise, and less-than-perfect results,” she wrote. “Because of these characteristics, all owes, be they money or justice, are seldom fully satisfied.”
Citing a bankruptcy ruling in a 2019 lawsuit in which the city of Purdue was not involved, Judge Lee also said the Sacklers’ release was “not a badge of merit that anyone gets in return for actively contributing to the rebuilding process.” emphasized. They are “participation trophies” or “venus for doing a good job”. ”
Sackler’s liability protection does not apply in the event of criminal prosecution.
Purdue University filed for bankruptcy in September 2019 after a flurry of opioid lawsuits against the company.
Tuesday’s ruling came more than a year after oral arguments before the panel of the Second Circuit. As the months go by, thousands continue to face promised payments being withheld and lawsuits remaining unresolved, even as the opioid epidemic itself, characterized by fentanyl use, continues to soar. Dozens of litigants complained.
The ruling was in favor of the City of Purdue, which appealed against a federal district judge’s decision to reverse a settlement originally approved by a bankruptcy court judge. 2021. However, most of the parties who had challenged the 2021 plan eventually dropped their objections after the Sacklers increased their payment offer by about $1.73 billion.
The only remaining opponents include several Canadian municipalities, a few individuals, and the U.S. Trustees, a program of the Department of Justice that oversees the bankruptcy system. Ms. Jacoby, a North Carolina law professor, said the U.S. Trustee’s argument to pursue the case was weak because the last opposing state agreed with the Purdue plan.
The U.S. Trustee declined to comment on Tuesday’s ruling.
In a statement following the judgment, he said: Purdue He called the decision “a win for Purdue’s creditors, including the overwhelmingly supportive states, local governments and victims.” plan Reorganization. ”
“Our focus going forward is to provide billions of dollars in value as a remedy for victims, mitigation of the opioid crisis, and overdose relief,” the statement continued. “Our creditors believe that this plan is the best option to help those most in need, the fairest and fastest way to resolve lawsuits, and specifically to fund efforts to mitigate the opioid crisis. We understand it’s the only way we can provide billions of dollars in value to deliver.”
The families of the two brothers of the city of Purdue’s founders, Dr. Mortimer and Dr. Raymond Sackler, both deceased, said in a joint statement: community in need. We are pleased with the court’s decision to allow the agreement to move forward and look forward to it taking effect as soon as possible. ”
