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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Thomas – 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 has rejected painkiller manufacturer Purdue Pharma’s bankruptcy settlement plan. The plan included an extraordinary measure to protect the Sackler family owners from further liability due to America’s opioid epidemic, in exchange for providing money for compensation and rehabilitation treatments.
The ruling in Harrington v Purdue Pharma blocks a controversial deal approved by a federal bankruptcy court in New York that was first rejected by a district court and then upheld on appeal before being put on hold while the U.S. Department of Justice examines the deal contested. at the Supreme Court. Oral arguments were held last December.
The deal was designed to allow Purdue, the Connecticut company behind the prescription opioid OxyContin, to restructure and also protect the relevant Sackler billionaires without having to file for personal bankruptcy. The family agreed to contribute $6 billion to settle the enormous fortune they made from OxyContin and give up ownership.
The company wanted to use the bankruptcy settlement to resolve thousands of lawsuits, many of which were filed by U.S. state and local governments. They alleged that Purdue Pharma fueled a crisis that ultimately killed half a million Americans by claiming that its lead drug was not addictive while encouraging widespread prescribing.
U.S. Solicitor General Elizabeth Prelogar had argued that releasing the Sacklers from future liability is not permitted by bankruptcy law and constitutes an “abuse of the bankruptcy system.”
After years of lawsuits and scandals, court filings showed that 95% of creditors in the Purdue bankruptcy case had agreed to sign the plan, although many were reluctant to do so and saw it in part as the only way to finally get some compensation. 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 settlement could be reached without resorting to the protections of Chapter 11 of the Bankruptcy Code or releasing the billionaire Sacklers behind the company from liability.
The Supreme Court ruling now leaves matters between the company and the plaintiffs unresolved. The case is believed to have implications for other business bankruptcies where business owners or officers seek immunity from liability.
More details coming soon…
