Bankruptcy deal for OxyContin maker blocked

WASHINGTON (AP) — The Supreme Court on Thursday temporarily blocked a nationwide settlement with OxyContin maker Purdue Pharma that would shield members of the Sackler family who own the company from civil lawsuits over the toll of opioids.

The justices agreed to a request from the Biden administration to put the brakes on an agreement reached last year with state and local governments. In addition, the high court will hear arguments before the end of the year over whether the settlement can proceed.

The deal would allow the company to emerge from bankruptcy as a different entity, with its profits used to fight the opioid epidemic. Members of the Sackler family would contribute up to $6 billion.

But a key component of the agreement would shield family members, who are not seeking bankruptcy protection as individuals, from lawsuits.

The US Bankruptcy Trustee, represented by the Justice Department, opposes releasing the Sackler family from legal liability.

The justices directed the parties to address whether bankruptcy law authorizes a blanket shield from lawsuits filed by all opioid victims.

The 2nd US Circuit Court of Appeals had allowed the reorganization plan to proceed.

Lawyers for Purdue and other parties to the agreement had urged the justices to stay out of the case.

“We are confident in the legality of our nearly universally supported Plan of Reorganization, and optimistic that the Supreme Court will agree,” the company said in a statement following the court’s action Thursday.