Supreme Court blocks Purdue Pharma's massive opioid settlement, will hear challenge

[BumRushDaShow]

Last edited Thu Aug 10, 2023, 07:46 PM - Edit history (2)

Source: CNBC

The Supreme Court on Thursday blocked, for now, a multi-billion-dollar bankruptcy settlement by Purdue Pharma that would protect its Sackler family owners from civil lawsuits related to the opioid crisis. The Supreme Court also said it will hear a U.S. Bankruptcy trustee’s challenge to the settlement by Purdue, the maker of the opioid OxyContin, with all 50 U.S. states, and other parties.

The order Thursday directed parties to file briefs on a question of whether bankruptcy courts can approve a Chapter 11 reorganization that releases claims by non-debtors against non-debtor third parties “without the claimants’ consent.” There were no dissents by any of the court’s justices in the order granting the requested hold, which was sought by the Department of Justice.

The DOJ had argued in a court filing that the release of the Sacklers from civil liability “is not authorized by the Bankruptcy Code, constitutes an abuse of the bankruptcy system, and raises serious constitutional questions.” The Sackler family agreed as part of the settlement to contribute $6 billion to it over the next two decades.

The agreement also obligates Purdue to contribute more money after it becomes a different entity whose proceeds will be used to alleviate the opioid abuse crisis. The case will be argued in December at the high court. Purdue Pharma, in a statement, said “We are confident in the legality of our nearly universally supported Plan of Reorganization, and optimistic that the Supreme Court will agree.”

Read more: https://www.cnbc.com/2023/08/10/supreme-court-blocks-purdue-pharmas-6-billion-opioid-settlement-will-hear-challenge.html

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Article updated.

Previous articles/headline -

Supreme Court blocks Purdue Pharma's $6 billion opioid settlement, will hear challenge

The Supreme Court on Thursday blocked, for now, a $6 billion bankruptcy settlement by Purdue Pharma that would protect its Sackler family owners from civil lawsuits related to the opioid crisis.

The Supreme Court also said it will hear a challenge to the settlement by Purdue, the maker of the opioid OxyContin, by a U.S. Bankruptcy trustee.

The order Thursday directed parties to file briefs on a question of whether bankruptcy courts can approve a Chapter 11 reorganization that releases claims by non-debtors against not-debtor third parties "without the claimants' consent."

"We are confident in the legality of our nearly universally supported Plan of Reorganization, and optimistic that the Supreme Court will agree," the company said in a statement. "Even so, we are disappointed that the U.S. Trustee, despite having no concrete interest in the outcome of this process, has been able to single-handedly delay billions of dollars in value that should be put to use for victim compensation, opioid crisis abatement for communities across the country, and overdose rescue medicines."

The Supreme Court on Thursday blocked for now a $6 billion bankruptcy settlement by Purdue Pharma that would protect its Sackler family owners from civil lawsuits related to the opioid crisis. The Supreme Court also said it will hear a challenge to the settlement by Purdue, the maker of the opioid OxyContin, by a U.S. Bankruptcy trustee.

The order Thursday directed parties to file briefs on a question of whether bankruptcy courts can approve a Chapter 11 reorganization that releases claims by non-debtors against not-debtor third parties "without the claimants' consent."

There were no dissents by any of the court's justices in the order granting the requested hold, which was sought by the Department of Justice.

The DOJ had argued in a court filing that the release of the Sacklers from civil liability "is not authorized by the Bankruptcy Code, constitutes an abuse of the bankruptcy system, and raises serious constitutional questions." The case will be argued in December at the high court.

The Supreme Court on Thursday blocked for now a $6 billion bankruptcy settlement by Purdue Pharma that would protect its Sackler family owners from civil lawsuits related to the opioid crisis. The Supreme Court also said it will hear a challenge to the settlement by Purdue, the maker of the opioid OxyContin.

The order Thursday directed parties to file briefs on a question of whether bankruptcy courts can approve a Chapter 11 reorganization that releases claims by non-debtors against not-debtor third parties "without the claimants' consent."

Purdue reached the settlement in May with U.S. states and thousands of local governments. The value of the settlement could reach more than $10 billion ultimately.

Under the deal, the Sackler family agreed to relinquish control of the Stamford, Connecticut, company. The Supreme Court case will be argued by the end of this year.

Original article -

The Supreme Court on Thursday blocked for now a $6 billion bankruptcy settlement by Purdue Pharma that would protect its Sackler family owners from civil lawsuits related to opioid abuse.

The Supreme Court also said it will hear a challenge to the settlement.


This is breaking news. Please check back for updates.

[NCDEM4EVR]

1. HMMMM

Wonder how much the Sackler's will be giving to the Alito/Thomas fund.

[Fullduplexxx]

2. Well that's what's going on they see a chance for grift

[elleng]

4. HAVE BEEN giving.

[ananda]

5. I know. That block was bought and paid for.

This is all SO ugly.

[former9thward]

10. If it was bought and paid for why was the settlement blocked?

And no dissents?

[elleng]

3. Gonna be one of the longest running causes/litigations, 'thanks' to sacklers 'power.'

[former9thward]

9. They must not have much power since the SC blocked their settlement deal.

No dissents...

[bucolic_frolic]

6. Bankruptcy Court seeks to preserve the viability of the business

Since about 1990 debtors usually wind up with the whole company, that is to say the remaining assets. I don't even think they bother to refer to "debtor-in-possession" bankruptcy anymore, it's just assumed. Time was shareholders sometimes got a small piece of the carcass. Shareholders being the former owners before entering bankruptcy.

I'm most familiar with retail bankruptcy, and I know there are at least two types of bankruptcy, Chapter 7 and Chapter 11. One is to return the company to profitability, the other to liquidate the assets and cease operation. In a retail proceeding, the customers get nothing. I don't even know if they have standing. I doubt warranties are even honored.

The question I have here is how the owners of the company retained their investment and escaped liability. Yes I know, a court ruled. Sleight of hand in my estimation.

[BumRushDaShow]

7. They supposedly gave up the company

From the article -

Under the deal, the Sackler family agreed to relinquish control of the Stamford, Connecticut, company.

In May, the 2nd U.S. Circuit Court of Appeals in New York approved the plan.

This was DOJ's SCOTUS appeal of their request to delay the bankruptcy agreement - https://www.democraticunderground.com/10143107062

I *think* this from almost 3 years ago was the original settlement (under the 45 DOJ) before the bankruptcy court review/approval and apparent reworking of the settlement - https://www.democraticunderground.com/10142610046

[FakeNoose]

12. This happened after they raided all the financial assets out of the company

The Sackler family wealth has been safely hidden in offshore accounts for at least 10 years. Maybe longer.

[BumRushDaShow]

13. Well this current "settlement" was apparently the one agreed to by the Bankruptcy Court

and not DOJ, from what I gather. The 2nd Circuit upheld the Bankruptcy agreement and that is why the appeal to the SCOTUS.

And agree they managed to "get theirs" before all this came down which is why it is in court today - to keep the option open for claw backs of that "hidden money" by any not party to this particular settlement, and that would need to come from the family (corporation).

[moniss]

8. Yes basically stated the settlement is something like

this : OK, OK. We will agree to let you have the rotted hulk of a company that we have loaded with all of the liability as long as you excuse us for all of this. But we will only do this if we get to keep the money. Deal? (whispers) Don't cash the checks for at least a month after it all settles OK? (back on the record) Well that settles it then and thank you for understanding and for your cooperation.

[republianmushroom]

11. I like this.

[SomewhereInTheMiddle]

14. It's not the money, it's the immunity ...

... that the DOJ seems to be objecting to.

the release of the Sacklers from civil liability “is not authorized by the Bankruptcy Code,

Giving up $6 billion now to head off ten or a hundred times that in loses to multiple lawsuits in the future seems to be what the Sacklers are after.

I can see why the DOJ does not want this precedent set. I just done see how stopping the settlement now won't end up pushing back any sort of restitution or justice the people who suffered from Purdue's bad actions.

What is the lesser of two evils?