Brendan Pierson & Mike Spector, Maria Chutchian
Reuters
Originally posted 16 DEC 21
A federal judge overturned a roughly $4.5 billion settlement that legally shielded members of the Sackler family who stand accused of helping fuel the U.S. opioid epidemic, a decision that threatened to upend the bankruptcy reorganization of their company, OxyContin maker Purdue Pharma LP.
U.S. District Judge Colleen McMahon said in a written opinion on Thursday the New York bankruptcy court that approved the settlement did not have authority to grant the Sacklers the legal protection from future opioid litigation that formed the linchpin of Purdue’s reorganization.
Purdue said it would appeal the decision.
"While the district court decision does not affect Purdue’s rock-solid operational stability or its ability to produce its many medications safely and effectively, it will delay, and perhaps end, the ability of creditors, communities, and individuals to receive billions in value to abate the opioid crisis," Purdue Chairman Steve Miller said in a statement.
The Sacklers had insisted on the legal shields, known as nondebtor releases because they protect parties that have not filed for bankruptcy themselves, in exchange for contributing $4.5 billion toward resolving widespread opioid litigation.
The Sacklers threatened to walk away from the settlement absent the guaranteed legal protections.
Representatives for the Sacklers did not immediately respond to a request for comment late on Thursday.
Attorney General Merrick Garland said in a statement he was pleased with the ruling.
"The bankruptcy court did not have the authority to deprive victims of the opioid crisis of their right to sue the Sackler family," Garland said.
Note: If you have not watched Dopesick on Hulu, please do. Excellent portrayal of the level of harm and psychopathology with members of this family.
