$10B OxyMorons
Purdue owners ‘knew’ transfer was fishy
Members of the wealthy Sackler family, owners of OxyContin maker Purdue Pharma, have long denied that the $10 billion they transferred from their company over the course of a decade was an unlawful attempt to shield assets in anticipation of litigation over their role in the opioid crisis.
But a review of e-mails, 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 e-mail 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.