Morally bankrupt

The federal bankruptcy system is morally bankrupt. The system has been abused by corporations and rich people to the point it no longer upholds its mission: providing a limited shelter from creditors so financially strapped individuals and companies could either liquidate or reorganize and put their affairs back in order.

The mission has morphed into helping the rich hold onto their vast financial assets while ensuring the people they’ve wronged get as little as possible.

Years ago, drug maker Johnson & Johnson faced a public relations disaster after losing a Missouri lawsuit related to cancer-causing asbestos in Johnson’s Baby Powder. A $2 billion verdict in favor of women who sued after contracting ovarian cancer went all the way to the U.S. Supreme Court, where it was upheld.

Instead of paying out and accepting responsibility, Johnson & Johnson formed a shell company in Texas, LTL, then assigned all financial and legal responsibility for the baby powder cases to the new company.

Two weeks ago, LTL filed for bankruptcy. Now all financial awards are in limbo. Johnson & Johnson, reported to have more than $25 billion in cash reserves, likely will be shielded from future liability.

Then, of course, there’s the billionaire Sackler family of Purdue Pharma infamy. They are the subject of a new Hulu series, “Dopesick,” recounting how the family devised a strategy to market the opioid drug OxyContin as a miracle pain reliever.

It was specifically advertised to doctors as non-addictive. In fact, it was highly addictive. The Sacklers found a way to tie themselves to the bankruptcy filing of Purdue Pharma in order to protect their fortune. Purdue Pharma reached a deal to pay out $4.5 billion. Part of its bankruptcy deal is that it will dissolve. The Sacklers, who are nowhere close to bankruptcy, get to continue rolling in billions.

The bankruptcy judge acknowledged that the settlement protecting the Sacklers was a “bitter result.”

These maneuvers drip with cynicism about the ease with which the rich and powerful can manipulate the justice system to their favor, never fully accounting for the lives they’ve ruined.