Judge kills opioid settlement
A federal judge rejected OxyContin maker Purdue Pharma’s bankruptcy settlement of thousands of lawsuits over the opioid epidemic Thursday because of a provision that would protect members of the Sackler family from facing litigation of their own.
U.S. District Judge Colleen McMahon in New York found that federal bankruptcy law does not give the bankruptcy judge who had accepted the plan the authority to grant that kind of release for people who are not declaring bankruptcy themselves.
In a statement Thursday night, the company said that it would appeal the ruling and at the same time try to create another plan that its creditors will agree to.
Purdue said the ruling will not hurt the company’s operations, but it will make it harder for company and Sackler money to be used to fight the opioid crisis as the legal fight continues.
“It will delay, and perhaps end, the ability of creditors, communities, and individuals to receive billions in value to abate the opioid crisis,” said Steve Miller, chairman of the Purdue board of directors. “These funds are needed now more than ever as overdose rates hit record highs, and we are confident that we can successfully appeal this decision and deliver desperately needed funds to the communities and individuals suffering in the midst of this crisis.”
Representatives of the two branches of the family that own the company did not immediately respond to a request for comment.
Connecticut Attorney General William Tong, who was among a handful of state officials seeking to have the deal undone, called the ruling “a seismic victory for justice and accountability.” Tong said the ruling will “reopen the deeply flawed Purdue bankruptcy and force the Sackler family to confront the pain and devastation they have caused.”