Victims of opioid crisis affected by delay in compensation
In a significant ruling on Thursday, the Supreme Court blocked the bankruptcy reorganization of opioid maker Purdue Pharma, casting doubt on billions of dollars in settlements for victims of the opioid crisis. The court found that members of the Sackler family, who controlled Purdue Pharma and had agreed to pay $6 billion as part of the settlement, could not be released from future liability.
The decision came after a legal battle between various parties involved in the case, including the U.S. Trustee Program and several state attorneys general. The trustee program argued that the bankruptcy court did not have the authority to release third parties like the Sacklers from liability without creditor consent or placing their assets on the table.
The ruling is a major setback for victims of opioid addiction and their families, who were counting on the settlement funds to help address their losses. The case is expected to be appealed, potentially leading to further delays in compensation for those affected by the crisis.
Purdue Pharma has been at the center of the opioid epidemic for decades, with its OxyContin painkiller being aggressively marketed and contributing to thousands of deaths from overdoses. The company filed for bankruptcy in 2019, seeking protection from ongoing lawsuits related to its role in the crisis.
The Supreme Court's decision is a reminder of the complexities involved in large-scale mass tort cases and the importance of ensuring that all parties are treated fairly and justly. It also highlights the need for continued efforts to address the opioid crisis, which continues to impact communities across America.
The Supreme Court blocked Purdue Pharma’s bankruptcy reorganization.
Justice Neil Gorsuch wrote that the Sacklers could have declared bankruptcy but instead sought to use Purdue Pharma’s bankruptcy proceedings to resolve pending legal claims and avoid liability in future cases.
During bankruptcy proceedings, the Sackler family agreed to pay around $6 billion that could be used to settle opioid-related claims but only in return for a complete release from any liability in future cases.
No Sacklers have been involved in the company since 2019.
Accuracy
The Supreme Court blocked Purdue Pharma's bankruptcy reorganization.
The settlement included legal protections for the Sackler family.
Purdue Pharma L.P. can be released from further liability under the settlement, but non-company parties like the Sackler family cannot.
The Supreme Court rejected a provision in a settlement with Purdue Pharma that would have shielded members of the Sackler family from civil claims related to the opioid epidemic.
Members of the Sackler family cannot be shielded from lawsuits over their role in the opioid crisis as part of a bankruptcy settlement.
The decision jeopardizes a carefully negotiated settlement Purdue and the Sacklers had reached, which promised up to $6 billion to states, local governments, tribes and individuals to address the opioid epidemic.
Accuracy
The liability shield, which binds potential claimants without their consent and offers wide-ranging legal protection for the Sacklers, was ruled as a misuse of the bankruptcy system by the Supreme Court.
