Dems aim to close ‘loophole’ to Purdue owners
A few months after two of Purdue Pharma’s owners were grilled by a Congressional committee about their company’s alleged culpability in the opioid crisis, the panel’s chairwoman is spearheading an effort to overturn legal protections that they have gained through the firm’s bankruptcy.
Rep. Carolyn Maloney, D-New York, and Rep. Mark DeSaulnier, D-Calif., have introduced the “Stop Shielding Assets from Corporate Known Liability by Eliminating Non-Debtor Releases Act,” or SACKLER Act. It aims to close a “loophole” by preventing those who have not filed for bankruptcy from obtaining releases from lawsuits brought by government bodies.
The legislation reflects the widespread pressure against the Sackler family members who own Purdue, as the company tries to negotiate through its Chapter 11 bankruptcy a comprehensive settlement of approximately 3,000 local and state lawsuits. The federal court handling the case has frozen the litigation — with many of those complaints, such as Connecticut’s, naming the owners among the defendants.
“Allowing non-debtor releases from lawsuits brought by government entities deprives taxpayers of relief, even if the defendant — in this case, the Sacklers — can afford it,” Maloney, D-New York, chairwoman of the House Committee on Oversight and Reform, said in a statement. “Passing the SACKLER Act to close this loophole is one way Congress can help to ensure that the Sacklers — who never filed for bankruptcy themselves — are held accountable for their role in fueling the opioid epidemic and promote justice for the victims and families who have been harmed by their actions.”
Among its key components, the SACKLER Act would generally bar courts from issuing stays exceeding 90 days on actions against “non-debtors,” such as the Sacklers, who have not personally filed for bankruptcy.
Purdue officials declined to comment on
“But I struggle with what the ‘killer app’ is. If you want to talk about crowdfunding, I get really excited because it’s a new way of raising capital for restaurants and car washes. But what’s the equivalent in cryptocurrency — ‘law enforcement can’t see what I’m doing’? How excited am I supposed to get about that?”
The rise of cryptocurrencies has sparked concerns about a possible regulatory backlash.
“Every country treasures its monopoly on controlling the supply and demand. They don’t want other monies to be operating or competing because things can get out of control,” Ray Dalio, founder of Westport-based Bridgewater Associates, the world’s largest hedge fund, said in a recent interview with Yahoo Finance Editor-in-Chief Andy Serwer. “So I think that it would be very likely that you will have it under a certain set of circumstances outlawed the way gold was outlawed.”
Bridgewater officials were not immediately reached to comment in response to an inquiry from Hearst Connecticut Media seeking more information about Dalio’s position on the regulation of cryptocurrencies.
The U.S. Securities and Exchange Commission has not enacted cryptocurrency-specific rules.
“Bitcoin and other cryptocurrencies brought new thinking to payments but raised new issues of investor protection we still need to attend to,” Gary Gensler, President Joe Biden’s nominee for SEC chairman, said during a March 2 Senate Banking Committee hearing, Reuters reported.
Gensler also said in the hearing that “it’s important for the SEC to provide guidance and clarity… Sometimes that’s a clarity that will be a thumbs up, but even if it’s thumbs down, it’s important to provide that.”
A message left for the state Department of Banking inquiring about the extent of its cryptocurrency regulation was not returned.
In response to Dalio’s comments, Himes said that he agreed that the “United States gets massive benefits from having the dollar being the reserve currency.” He was more skeptical about the prospect of a government clampdown on cryptocurrencies.
“I’m not sure you could prohibit a cryptocurrency, especially in a country like the United States,” Himes said. “I don’t know that that’s either technologically or politically feasible.”