Current:Home > ScamsA landmark appeals court ruling clears way for Purdue Pharma-Sackler bankruptcy deal -Edge Finance Strategies
A landmark appeals court ruling clears way for Purdue Pharma-Sackler bankruptcy deal
TradeEdge Exchange View
Date:2025-04-11 03:08:31
In a landmark ruling Tuesday, a federal appeals court in New York cleared the way for a bankruptcy deal for opioid manufacturer Purdue Pharma.
The deal will shield members of the Sackler family, who own the company, from future lawsuits.
The 2nd Circuit Court of Appeals spent more than a year reviewing the case after a lower court ruled it was improper for Purdue Pharma's bankruptcy deal to block future opioid-related lawsuits against the Sackler family.
The Sacklers earned billions of dollars from the sale of OxyContin and other opioid pain medications.
This latest ruling overturns the lower court's December 2021 decision and clears the way for a deal hashed out with thousands of state and local governments.
As part of the bankruptcy settlement, the Sacklers are expected to pay roughly $5 to $6 billion and give up control of Purdue Pharma.
Roughly $750 million from that payout will go to individuals across the U.S. who became addicted to OxyContin and to the families of those who died from overdoses.
Lindsey Simon, who studies bankruptcy law at the University of Georgia School of Law, described this ruling as a solid victory for proponents of the deal.
"It's very clear that in the 2nd Circuit this kind of [bankruptcy] remedy is appropriate under certain circumstances," Simon said. "There were some questions about whether it would be permitted going forward. It is."
The decision follows years of complex litigation
The bankruptcy settlement, first approved in September 2021, has been controversial from the outset. Even the bankruptcy judge who presided over the deal, Judge Robert Drain, described it as a "bitter result."
Nan Goldin, an activist who helped publicize Purdue Pharma's role in the national opioid crisis, told NPR at the time that the deal amounted to a miscarriage of justice.
"It's shocking. It's really shocking. I've been deeply depressed and horrified," Goldin said in 2021.
Purdue Pharma's aggressive marketing of OxyContin, under the Sackler family's ownership, is widely seen as a spur to the national opioid crisis.
Prescription pain pill overdoses have killed hundreds of thousands of Americans. Public health experts say the spread of OxyContin and other pain medications also opened the door to the wider heroin-fentanyl epidemic.
In a statement Tuesday, Sackler family members praised the ruling.
"The Sackler families believe the long-awaited implementation of this resolution is critical to providing substantial resources for people and communities in need," they said in a statement sent to NPR.
"We are pleased with the Court's decision to allow the agreement to move forward and look forward to it taking effect as soon as possible."
Purdue Pharma, which has pleaded guilty twice to federal criminal charges relating to opioid sales and marketing, also sent a statement to NPR calling the ruling proper.
"Our focus going forward is to deliver billions of dollars of value for victim compensation, opioid crisis abatement, and overdose rescue medicines," the company said in a statement.
"Our creditors understand the plan is the best option to help those who need it most."
The ruling only applies to New York, Connecticut and Vermont
Tuesday's ruling is also controversial because it extends the power of federal bankruptcy court to shelter wealthy members of the Sackler family who never declared bankruptcy.
However, this ruling only applies to the 2nd Circuit region of the U.S. in New York, Connecticut and Vermont.
A national resolution of the debate over the power of bankruptcy courts to shelter non-bankrupt companies and individuals from lawsuits still requires action by Congress or the U.S. Supreme Court.
"Until Congress steps in and provides clarity to the issue or the Supreme Court takes up this issue and gives us an opinion, we don't know nationwide how this will come down," Simon told NPR.
She predicted that the ruling will spur other companies to attempt to limit their liability and legal exposure using federal bankruptcy courts.
veryGood! (8)
Related
- As Trump Enters Office, a Ripe Oil and Gas Target Appears: An Alabama National Forest
- Officer fatally shoots man who confronted him with knife, authorities say
- US deports about 50 Haitians to nation hit with gang violence, ending monthslong pause in flights
- Amazon Prime's 'Fallout': One thing I wish they'd done differently
- 'Most Whopper
- Man charged in shooting of 5 men following fight over parking space at a Detroit bar
- 2024 MLB mock draft: Where are Jac Caglianone, other top prospects predicted to go?
- AT&T offers security measures to customers following massive data leak: Reports
- North Carolina trustees approve Bill Belichick’s deal ahead of introductory news conference
- Is 'Under the Bridge' a true story? What happened to Reena Virk, teen featured in Hulu series
Ranking
- The FBI should have done more to collect intelligence before the Capitol riot, watchdog finds
- 12 students and teacher killed at Columbine to be remembered at 25th anniversary vigil
- Alleged homicide suspect fatally shot by police in San Francisco Bay Area
- Liquor sales in movie theaters, to-go sales of cocktails included in New York budget agreement
- Trump suggestion that Egypt, Jordan absorb Palestinians from Gaza draws rejections, confusion
- Orlando Bloom Reveals Whether Kids Flynn and Daisy Inherited His Taste For Adventure
- Gunman shot himself and wasn’t killed by officer, chief says
- Ashanti and Nelly are engaged and expecting their first child together
Recommendation
How to watch new prequel series 'Dexter: Original Sin': Premiere date, cast, streaming
Ryan Reynolds Makes Rare Comment About His and Blake Lively's Daughter James
Valerie Bertinelli's apparent boyfriend confirms relationship: 'I just adore her'
United Arab Emirates struggles to recover after heaviest recorded rainfall ever hits desert nation
'Malcolm in the Middle’ to return with new episodes featuring Frankie Muniz
Alabama court authorizes executing a man convicted of killing a delivery driver
Massachusetts IRS agent charged with filing false tax returns for 3 years
Man granted parole for his role in the 2001 stabbing deaths of 2 Dartmouth College professors