standard
Conservative bloc
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Alito – Majority
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Barrett – Majority
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Gorsuch – Majority
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Kavanaugh – Minority
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Roberts – Minority
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Tomás – Majority
liberal bloc
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Jackson – Majority
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Kagan – Minority
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Sotomayor – Minority
The U.S. Supreme Court rejected painkiller maker Purdue Pharma’s bankruptcy resolution plan, which included an extraordinary measure to protect Sackler family owners from greater liability for the American opioid epidemic, in exchange for providing funds for compensation and treatment. of rehabilitation.
The ruling in Harrington v Purdue Pharma blocks a controversial settlement approved by a federal bankruptcy court in New York, which was initially overturned by a district court and then upheld on appeal before being suspended while the US Department of Justice challenged it. in the supreme court. Oral arguments were heard last December.
The deal was constructed to allow Purdue, the Connecticut company behind the prescription opioid OxyContin, to restructure and also protect the relevant Sackler billionaires without them having to declare personal bankruptcy. The family agreed to contribute $6 billion to the settlement from the vast fortune they made from OxyContin and give up ownership.
The company wanted to use the bankruptcy settlement to resolve thousands of lawsuits, many of them filed by state and local governments across the U.S., alleging that Purdue Pharma fueled a crisis that ended up killing half a million Americans by claiming its flagship drug was not addictive. , while encouraging mass overprescribing.
US Attorney General Elizabeth Prelogar argued that the Sacklers’ release from future liability is not authorized by the bankruptcy code and constitutes an “abuse of the bankruptcy system.”
After years of litigation and scandal, court documents showed that 95% of creditors in Purdue’s bankruptcy case had agreed to join the plan, although many were reluctant, in part seeing it as the only way to finally get some payoff. But several states, Canadian municipalities and indigenous tribes, and more than 2,600 individuals, including high-profile activists, opposed it.
The U.S. government argued that a deal could be forged without resorting to the protections of Chapter 11 bankruptcy law or shielding the billionaire Sacklers behind the company from liability.
The Supreme Court’s decision now leaves issues between the company and the plaintiffs unresolved. The case is seen as having consequences for other corporate bankruptcies in which company owners or employees want immunity from liability.
More details coming soon…
