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 But a review of emails, memos, depositions, legal motions and other
documents unsealed late on Friday in Purdue's bankruptcy proceedings
show Sackler family members discussed potential litigation exposure
at least as early as 2007, a full decade before they faced a new
wide-ranging legal attack and significant financial transfers
stopped. The documents were unsealed in response to legal actions
from Reuters and other news organizations seeking to remove their
heavy redactions.
Purdue faced investigations and litigation before 2007, which it
settled. Whether creditors can demonstrate that financial transfers
since then were legally dubious hinges in part on whether they can
show that the Sacklers knew they faced additional and significant
litigation that could threaten Purdue’s solvency and the family’s
wealth, estimated in December at $10.8 billion by Forbes magazine.
In response to questions from a House oversight panel last week,
David Sackler, who served on Purdue’s board from 2012 to 2018,
testified that neither he, nor others, anticipated vast litigation
that now totals roughly 3,000 legal actions. “I don't believe anyone
knew that lawsuits that really began in earnest in 2017 would be
coming back in 2008,” he told lawmakers.
But in a March 2007 email with relatives, his uncle, Jonathan, at
the time a director, cited “ongoing risks” two months before a
Purdue affiliate pleaded guilty to misbranding OxyContin, adding
that “if there’s a future perception that Purdue has screwed up on
compliance, we could get murdered.”
In a subsequent message, he said the family was “not really braced
for” challenges that included “the emergence of numerous new
lawsuits.” Jonathan died in June.
In May 2007, a week after the company affiliate's guilty plea, David
Sackler expressed concerns about future litigation to his father and
uncle, the latter of whom assured him there was no basis for suing
the family.
“Well, I hope you're right and under logical circumstances I'd agree
with you, but we're living in America. This is the land of the free
and the home of the blameless,” Sackler wrote in an email. “We will
be sued. Read the op-ed stuff in these local papers and ask yourself
how long it will take these lawyers to figure out that we might
settle with them if they can freeze our assets and threaten us.”
The message was sent years before David Sackler joined Purdue’s
board, at a time he knew little about the company's affairs, his
lawyers said in a court filing.
GAUGING LITIGATION RISK
In court filings, the family members contend that Purdue management
told them as recently as 2016 that they viewed opioid litigation
risk as low and that creditors citing their emails have taken
messages out of context. Most of the more than $10 billion they took
out of Purdue went toward business investments and paying taxes,
with Sackler-controlled entities receiving roughly $4 billion,
documents show.
"We supported the release of documents by the court and reaffirm
that members of the Sackler family who served on Purdue's board of
directors acted ethically and lawfully in every regard," Sackler
family members targeted with litigation said in a statement.
"These cherrypicked snippets of emails ignore the full context of
what they say and the rest of the legal filings, all of which
demonstrate how the fraudulent conveyance claims are entirely
without merit," added Daniel S. Connolly, a lawyer for the Raymond
Sackler wing of the family, referring to creditors' challenges
concerning the transfers.
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 The opioid epidemic has claimed
the lives of roughly 450,000 people across the
United States since 1999 due to overdoses from
prescription painkillers and illegal drugs such
as heroin and fentanyl. Purdue creditors have
pursued the company and family through the
company’s bankruptcy proceedings, forcing the
drugmaker and the Sacklers to turn over tens of
millions of documents.
State officials said the documents undercut the
family members' claims. “The Sacklers told Congress they did nothing
wrong,” said Massachusetts Attorney General Maura Healey, who has
sued the Sacklers and Purdue alongside nearly every other state.
“The evidence tells a different story – they got rich fueling the
opioid crisis and plan to walk away billionaires.”
‘WE DON’T WANT TO STAY’
Sackler family members also pursued acquiring additional product
liability insurance and explored selling Purdue outright to offload
its troubles, both without success, the documents showed.
In a February 2008 email, Mortimer D.A. Sackler
urged Richard Sackler, at one point Purdue’s president, to sell
their company. “Fundamentally, we don’t want to stay in this
business anymore (given the horrible risks, outlooks, difficulties,
etc) and I think the majority of your family feels the same way,”
Mortimer said. About a week later, he again pushed for a sale: “It
is simply not prudent for us to stay in the business given the
future risks we are sure to face and the impact they will have on
the shareholder value of the business and hence the family’s
wealth.”
‘TRULY SORRY’
Purdue said it produced tens of millions of documents to creditors,
including those that are privileged relating to the Sacklers, as
part of an effort to settle widespread litigation in a deal it
values at more than $10 billion, largely based on delivering
addiction treatment and overdose reversal medications under
development.
The company has proposed restructuring into an entity run for the
benefit of plaintiffs and no longer controlled by the Sacklers, who
would contribute $3 billion. The entity also would continue selling
OxyContin, which has drawn objections from state attorneys general
and Democrats on Capitol Hill.
Under a settlement with the U.S. Justice Department, Purdue pleaded
guilty in November to criminal charges for misconduct relating to
its opioids and agreed to more than $8 billion in penalties that
will mostly go unpaid.
Sackler family members agreed to pay $225 million to settle civil
claims that they disputed. Neither they, nor other individuals, have
been criminally charged.
At the congressional hearing, David Sackler said press accounts of
his family were wrong. "We also fully acknowledge that there is an
opioid crisis that has ruined too many lives and that OxyContin
addiction and abuse played a role in that. We are truly sorry to
everyone who’s lost a family member or suffered from the scourge of
addiction.”
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