Bankrupt Oxycontin manufacturer Purdue Pharma will shield its owners, members of the wealthy Sackler family, from opioid lawsuits in exchange for a $6 billion contribution to the company’s broader bankruptcy settlement, a A US appeals court ruled on Tuesday.
The 2nd US Circuit Court of Appeals based in New York said that US bankruptcy law allows legal protections for non-bankrupt parties, such as the Sacklers, in exceptional circumstances.
Purdue INVITING to use its bankruptcy case to settle thousands of lawsuits, many filed by state and local governments, that say Oxycontin helped start an opioid epidemic that has caused more than 500,000 US overdose deaths in two decades.
Purdue pleaded guilty to charges related to its opioid sales, while its owners expressed remorse but denied wrongdoing.
Members of the Sackler family have agreed to contribute up to $6 billion to a trust that will be used to pay claims by states, addiction victims, hospitals and others suing Purdue for misleading marketing of Oxycontin.
In return, the Sacklers will receive broad legal protection from lawsuits related to the opioid crisis.
The Sackler contribution accounts for most of the cash payment in a broader bankruptcy settlement that cost Purdue more than $10 billion.
A federal judge blocked the bankruptcy hearing in December 2021, ruling that it would not protect the Sackler family members from the lawsuits because they had not filed for bankruptcy themselves, leading to Purdue’s 2nd appeal Circuit.
Photo: (AP Photo/Toby Talbot, File)
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