Supreme Court Temporarily Blocks Purdue Pharma Bankruptcy Deal
The Supreme Court has issued a temporary block on a bankruptcy deal for Purdue Pharma, the maker of OxyContin, which aimed to shield the billionaire Sackler family from further civil lawsuits related to the opioid epidemic. The deal would have also limited the Sacklers’ personal liability to $6 billion. This order is likely to delay any payments to the thousands of plaintiffs who have sued Purdue and the Sacklers. The Supreme Court justices have agreed to hear arguments in December to determine whether the agreement is authorized by the U.S. bankruptcy code. This case could have significant implications for similar lawsuits.
The Purdue agreement involves a controversial practice of resolving lawsuits about mass injuries through bankruptcy courts, rather than traditional courts. In many of these agreements, third parties are protected from liability without having to declare bankruptcy themselves. The Supreme Court’s decision to hear this case adds to the uncertainty surrounding the plan to compensate those affected by the opioid crisis and protect the Sackler family. Plaintiffs will likely have to wait at least another year before they receive any payouts from the Purdue deal. Any ruling in this case could impact how other mass tort cases are handled.
The case involving Purdue Pharma is just one example of how bankruptcy courts are being used to resolve mass claims. Johnson & Johnson, for instance, is seeking to use bankruptcy court to address thousands of lawsuits related to allegations that its talcum-based baby powder caused ovarian cancer. The court’s decision to hear this case raises questions about whether bankruptcy courts should be granting legal immunity to wealthy individuals accused of serious wrongdoing.
The U.S. Trustee Program, an office in the Justice Department, has argued that bankruptcy judges do not have the power to permanently block lawsuits against company owners who have not sought personal bankruptcy protection. The government has stated that the Purdue agreement sets a troubling precedent and allows wealthy corporations and individuals to misuse the bankruptcy system to avoid mass tort liability. Lawyers for Purdue Pharma have argued that the government’s request to pause the deal is baseless and would harm victims and delay the distribution of funds to address the opioid crisis.
Members of the Sackler family are no longer on the board of Purdue Pharma and will relinquish their ownership stake in the company once the bankruptcy is completed. However, the family remains wealthy, with an estimated fortune of $11 billion. Victims’ groups and entities that were expecting funds to combat the opioid crisis have expressed frustration at the government’s challenge, as it further delays payments to those affected. Native American tribes, in particular, are in urgent need of the funds to prevent more deaths. The Supreme Court’s decision to hear this case brings hope for a swift resolution, as time is of the essence.
This news report summarizes the Supreme Court’s temporary block on the Purdue Pharma bankruptcy deal, which aimed to shield the Sackler family from further civil lawsuits related to the opioid epidemic. The court’s decision to hear this case raises questions about the use of bankruptcy courts to resolve mass tort cases and grant legal immunity to wealthy individuals accused of serious wrongdoing. The delay caused by the Supreme Court’s order will further postpone any payments to the plaintiffs and hinder efforts to address the opioid crisis. The case will be closely watched as its outcome could impact similar lawsuits and mass tort cases in the future.
Original Story at www.nytimes.com – 2023-08-11 02:22:01
Comments are closed.