US asks Supreme Court to delay Purdue Pharma bankruptcy settlement
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[July 29, 2023]
By Dietrich Knauth
NEW YORK (Reuters) - The U.S. Department of Justice on Friday asked the
U.S. Supreme Court to stop Purdue Pharma from proceeding with a
bankruptcy settlement that protects its Sackler family owners from
lawsuits.
An appeals court rejected a proposed delay earlier this week, ruling
that Purdue may proceed with a bankruptcy plan that was approved in May.
Purdue's bankruptcy plan would shield its owners from opioid lawsuits in
exchange for a $6 billion contribution to the company's broader
bankruptcy settlement.
The DOJ's bankruptcy watchdog, the Office of the U.S. Trustee, argued on
Friday that Purdue should not be allowed to move forward with its
restructuring before the Supreme Court had a chance to weigh in on legal
protections for non-bankrupt entities, an issue that has divided
bankruptcy courts across the U.S.
The U.S. Trustee argued that Purdue's settlement is an abuse of
bankruptcy protections meant for debtors in "financial distress," not
people like the Sacklers, who withdrew $11 billion from Purdue before
agreeing to contribute $6 billion to its opioid settlement.
Approving Purdue's bankruptcy plan "would leave in place a roadmap for
wealthy corporations and individuals to misuse the bankruptcy system,"
the U.S Trustee argued.
![](http://archives.lincolndailynews.com/2023/Jul/29/images/ads/current/nutrienag_sda_HEROES_2023.png)
Members of the Sackler family have denied wrongdoing but expressed
regret that the painkiller OxyContin "unexpectedly became part of an
opioid crisis." They said in May that the bankruptcy settlement would
provide "substantial resources for people and communities in need."
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![](../images/072923PIX/health25.jpg)
Bottles of prescription painkiller
OxyContin pills, made by Purdue Pharma LP sit on a counter at a
local pharmacy in Provo, Utah, U.S., April 25, 2017. REUTERS/George
Frey/File Photo
![](http://archives.lincolndailynews.com/2023/Jul/29/images/ads/current/graue_lda_preowned_072423.jpg) The Supreme Court set an Aug. 4
deadline for Purdue to respond.
Purdue has sought to use bankruptcy to resolve
thousands of lawsuits, many filed by state and local governments,
alleging that OxyContin helped kickstart an opioid epidemic that
caused more than 500,000 U.S. overdose deaths over two decades.
Purdue could not immediately be reached for comment. The
Connecticut-based company previously argued that the DOJ's proposed
delay would prevent Purdue from sending billions of dollars to U.S.
states and individual victims of the opioid crisis.
The lawsuits against Purdue and the Sacklers allege that the
drugmaker misled doctors about how addictive OxyContin was, causing
many patients to become hooked on opioids.
Similar lawsuits related to the U.S. opioid crisis have resulted in
more than $50 billion in settlements with manufacturers, drug
distributors and pharmacy chains.
(Reporting by Dietrich Knauth in New York; Editing by Matthew Lewis)
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