The nation’s highest court has decided to weigh in on the bankruptcy proceeding surrounding Purdue Pharmaceuticals. The multibillion-dollar settlement agreement has sparked controversy and criticism in a number of lower courts and a federal office of the U.S. Department of Justice (DOJ).
On August 10, the U.S. Supreme Court blocked the bankruptcy settlement plan of Purdue Pharmaceuticals, one of the major contributors to the opioid crisis through their drug Oxycontin. The settlement sought to put to rest thousands of claims of injury by using the U.S. bankruptcy court system. However, not everyone was on board with this plan of action.
The DOJ’s bankruptcy watchdog, the Office of the U.S. Trustee, issued a formal complaint about the settlement, arguing that the deal protected an important entity that was not declaring bankruptcy: the Sackler family.
This family of billionaires is the former owner of Purdue Pharmaceuticals. The Office of the U.S. Trustee argued that the Supreme Court should step in to resolve the heated debate over whether the Sackler family deserves bankruptcy protections without having to declare bankruptcy themselves. In particular, the Office of the U.S. Trustee points to the fact that before they put the company into bankruptcy, the Sacklers removed $11 billion from its coffers. This is especially notable as the Sackler family is only paying $6 billion to the bankruptcy settlement agreement over several years.
According to the New York Times, there are several reasons for the Supreme Court to take note of this particular bankruptcy case. First, the opioid crisis has been a matter of national concern. Second, agreements that shield third parties, such as the Sacklers, without having the third party declare bankruptcy is becoming an increasingly popular solution that companies such as Revlon are using to avoid liability. Third, this practice has created a sharp division in lower courts, and the Supreme Court’s decision on the matter would set a national precedent.
If the Supreme Court finds in favor of Purdue’s bankruptcy plan, a new road map will be laid for other businesses who seek to use bankruptcy as a means to resolve mass tort cases. However, if the Supreme Court finds against the bankruptcy plan, the entire settlement deal could be nullified, undoing years of negotiations and forcing a virtual restart.
If you or a loved one have been harmed by opioid addiction, you may be entitled to compensation. Contact MedTruth today for a free consultation and begin your journey to justice.