US Supreme Court halts Purdue’s $6 billion opioid settlement pending review
US Supreme Court
The United States Supreme Court, on Thursday (August 10) temporarily blocked a bankruptcy deal for Purdue Pharma that would have shielded members of the billionaire Sackler family from lawsuits over their role in the country’s opioid epidemic. This comes after the top court agreed to hear US President Joe Biden’s administration regarding the legality of OxyContin maker’s bankruptcy settlement.
What did the SCOTUS say?
The US Supreme Court has paused the bankruptcy proceedings about Purdue and its affiliates, saying that they will hold oral arguments in December in the Biden administration’s appeal of a lower court’s ruling upholding the settlement.
The order would possibly delay any payments to the thousands of plaintiffs who have sued the Sacklers and Purdue, the maker of the prescription painkiller OxyContin which has been widely blamed for the opioid crisis in the US.
The order by the SCOTUS, whose new term begins in October, comes in response to an objection filed by the Department of Justice, which said that Purdue’s plans allowed the members of the Sackler family to take advantage of legal protections meant for debtors in “financial distress,” not for billionaires like the Sacklers.
Sackler family members withdrew $11 billion from Purdue before agreeing to contribute $6 billion to its opioid settlement, said the Biden administration.
Purdue settlement
Purdue’s plan involves paying up to $6 billion to settle thousands of lawsuits filed by states, hospitals, people who had become addicted and others who have sued the Connecticut-based company over its misleading marketing of OxyContin in exchange for full immunity from all civil legal disputes.
The top court justices said they will hear arguments about whether the agreement is authorised by the US bankruptcy code. Purdue filed for Chapter 11 bankruptcy in 2019 to address its debts, nearly all of which stemmed from thousands of OxyContin-related lawsuits.
Purdue’s bankruptcy settlement, approved by a US bankruptcy judge in 2021, would provide around $10 billion in value to its creditors, said the company. However, the Biden administration and eight states challenged the settlement, but the states later dropped the opposition.
Purdue responds to court order
In a statement, Purdue said it was disappointed that the US Trustee, the DOJ’s bankruptcy watchdog, filed a challenge that has “single-handedly” delayed “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.”
It added that the company is confident about the legality of its “universally supported plan of reorganization” and that the SCOTUS will agree with it.
Plaintiffs respond to the settlement
A group comprising more than 60,000 people who have filed personal injury claims due to Purdue’s opioid products told the supreme court that they support the settlement, including legal immunity for the Sackler family.
(With inputs from agencies)
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