In a pivotal legal saga, the U.S. Supreme Court finds itself entangled in deliberations over Purdue Pharma’s bankruptcy settlement, raising profound concerns about shielding the affluent Sackler family from repercussions related to the opioid epidemic. Justices are caught in the delicate balance of preserving justice for victims while acknowledging potential harm if the settlement unravels.
The courtroom buzzed with arguments presented by President Joe Biden’s administration, challenging a lower court’s endorsement of the Stamford-based pharmaceutical giant’s settlement. At the heart of the matter is whether U.S. bankruptcy law permits the extension of legal safeguards to the Sackler family, who, notably, have not sought personal bankruptcy protection.
Under the proposed deal, Purdue’s owners would gain immunity by contributing up to $6 billion to settle an array of lawsuits, spanning states, hospitals, addiction-stricken individuals, and others. The quandary hinges on whether bankruptcy law should accommodate protections for the Sacklers, a family not directly entangled in the bankruptcy filing.
Some justices appeared skeptical of the administration’s position. Justice Brett Kavanaugh expressed doubt, questioning the categorical dismissal of plans that bankruptcy courts have traditionally approved for three decades. On the other hand, justices also voiced reservations about extending protections to the Sacklers, granting them a more favorable deal than a standard bankruptcy discharge.
Outside the courtroom, a poignant protest unfolded with about 50 demonstrators, including family members of opioid victims. Chants echoed, accusing the Sacklers and signs mourned those lost to opioids, branding the family as “the deadliest white-collar criminals – the Sackler cartel.”
The Purdue Pharma narrative unfolded with the company filing for Chapter 11 bankruptcy in 2019, a response to a barrage of lawsuits linking OxyContin to the devastating opioid epidemic. The proposed settlement, approved in 2021, aimed to provide $10 billion in value to various creditors and victims.
The Biden administration and eight states initially contested the settlement but withdrew opposition after increased contributions from the Sacklers. In May, the 2nd Circuit upheld the settlement, asserting that bankruptcy law permitted legal protections for non-bankrupt parties in extraordinary circumstances.
As the justices grapple with the complex case, the fate of Purdue’s bankruptcy settlement and the future of justice for opioid victims hang in the balance. The courtroom drama raises crucial questions about the intersection of bankruptcy law, corporate accountability, and the well-being of those affected by the opioid crisis.
