Alright, fam, the Supreme Court just hit pause on opioid giant Purdue Pharma’s bankruptcy restructuring deal.
The reason? The Biden administration wasn’t vibing with a part of the plan that shields the super-rich Sackler family from lawsuit liability.
So, here’s the tea, the Sackler fam, who were in control of Purdue, got the go-ahead for the bankruptcy to proceed by offering up $6 billion.
The crucial intervention of the Supreme Court and President Joe Biden in reviewing a landmark lawsuit against Purdue Pharma for their role in the opiate addiction crisis in the United States
But – and it’s a big but – only if they got a free pass from any future liability claims in return. Sketchy, right?
Citizens of the Internet, mark your calendars cos in December, SCOTUS is gonna go full-nerd mode by hearing arguments on this issue. Want the spoiler alert? They’ll most likely drop their final verdict early 2022.
Lawyers, pull up your suspenders. This case strings along the big question of whether the bankruptcy court even had the power to release the Sackler family from any opioid damage claims. Purdue, the company behind OxyContin – a painkiller notorious for fueling the opioid crisis – has been catching some serious heat. Especially as their aggressive OxyContin promotions went off the rails at the same time thousands of people were succumbing to opioid overdoses.
The Sackler fam didn’t petition for bankruptcy protection.
Instead, they hatched a plan with Purdue and some litigants to rebrand the company and work towards curbing the opioid catastrophe. But here’s where things get even more dodgy. The Sackler fam had already withdrawn a whopping $11 billion from Purdue, which seems like a move to cover their own backs.
Elizabeth Prelogar, the Solicitor General, threw shade at this deal, calling it a big no-no under bankruptcy law and a total abuse of the system. She said it’s blatantly unfair to prospective litigants who didn’t opt into releasing the Sacklers from future claims.
Earlier in May, the appellate court in New York gave the deal a thumbs up, despite objections from U.S. government trustee William Harrington, whose gig is to ensure bankruptcy ventures stick to the law.
Many states and the District of Columbia initially opposed the plan but somehow got on board after some renegotiations. Oddly enough, they didn’t join the Biden administration in requesting to halt the deal.
A squad representing 60,000 compensation seekers endorsed the plan at the Supreme Court, arguing that the Sackler’s release clause is crucial for a comprehensive settlement that benefits all opioid-affected communities. They believe it’ll result in direct pay-outs to the injured and set up a billion-dollar fund to prevent further harm. Lawyers sure know how to spin a yarn, huh?
by Valerie T.
