Purdue Pharma Owners’ Legal Shield is at the Heart of the Attraction | Job

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Due to the closure of the Purdue Pharma bankruptcy case bitter taste For those who want to see more responsibility towards members of the Sackler family.

Sacklers will relinquish ownership of the company, withdraw from its international opioid business and pay $ 4.5 billion in cash and philanthropic assets as part of a settlement. OK. Pre-approval According to a federal bankruptcy judge this week.

Some state attorneys general and a federal agency are considering appealing.

The central question of their debate: is it appropriate for members of a well-to-do family who have not filed for bankruptcy to enjoy such extensive protection?

Lawyers and victim advocates involved in the proceedings, including the proceedings of about 3,000 governments and other organizations, said members of the Suckler family, owners of Purdue, played an important role in overseeing the business and marketing of Oxycontin. Critics say the company’s best-selling prescription pain relievers have contributed to the opioid crisis in the United States

Maryland Attorney General Brian Frosh told The Associated Press: “They are the root of drug addiction and death in our country and around the world, literally billions of dollars taken from Purdue Pharma. You can hold it in between. “

Mr Frosch said he was considering recourse.

Lawyers from Connecticut, the District of Columbia, Washington, and the US Bankruptcy Trustee, a division of the Federal Department of Justice responsible for protecting the bankruptcy process, have said they intend to appeal.

Under the settlement, Suckler’s family gets what is called a “third party discharge” in the bankruptcy world. This is one of the most controversial questions in bankruptcy law.

These discharges have been used in complex bankruptcy cases involving multiple parties, facilitating settlements that are otherwise difficult or impossible to achieve. Dow Corning owner Dow Chemical was released in the 1990s from a lawsuit over the dangers of silicone breast augmentation surgery by the latter company. Owners of companies that manufactured asbestos were protected from lawsuits regarding the cancer risk associated with their products that began in the 1980s.

Some federal courts of appeal rejected the release, but the majority accepted it. This includes the Second Circuit, which can handle the appeal of the decision of U.S. bankruptcy judge Robert Drain, who ruled in the Purdue case from the courthouse in White Plains, New York.

A long-term bill pending in Congress called “Suckler Law” will prohibit the release of third parties. Even if adopted, it would be too late to influence the case of the same name.

In a preliminary ruling from the bench earlier this week, Drain explained in detail why he had allowed family protection as part of the settlement.

“I wish the plan provided more,” he told a member of the Sackler family. “But refusing to confirm does not jeopardize what the plan proposes.”

The settlement relinquishes ownership of Purdue and makes it a new company with a board of directors appointed by government officials. Money from family, business accounting, and future interest is used to pay for individual victims of the opioid crisis and to fund treatment, educational programs, and other epidemic control efforts. It’s supposed to be.

The crisis has been linked to overdose deaths of more than 500,000 people in the United States since 2000, involving either prescription pain relievers or illegal pain relievers such as illegally manufactured heroin or fentanyl. to augment.

Purdue Pharma, based in Stamford, Connecticut, estimates the settlement to be $ 10 billion, including the value of overdose antidotes and drug addiction treatments in development.

Suckler’s family, whose total wealth is estimated to be over $ 10 billion, have made it clear that they will not contribute to the settlement without procedural protection.

At a hearing on the restructuring plan last month, experts said it may not be possible to impose payments without reconciliation because much of the family’s assets are in the ‘foreigner. Bankruptcy judges said some families were strangers and could put their assets even further out of reach.

To make matters worse, Purdue University pleaded guilty to federal criminal offenses last year and agreed to confiscate $ 2 billion. As part of their legal proceedings, the company will have to pay the federal government its $ 225 million as long as it resolves other opioid litigation and uses the proceeds to fight the crisis. If the bankruptcy settlement is overturned, Purdue University will have to pay the federal government an additional $ 1.7 billion, much less money to be split between state, local government, and opioid victims.

“If they keep appealing, what will they get if they win,” said Lindsey Simon, assistant professor of law at the University of Georgia, who teaches bankruptcy law. “

This is the view taken by many state lawyers.

About half of the country’s prosecutors, including almost all Democrats, initially opposed the settlement. In an interview with AP last June, Massachusetts Attorney General Maura Healey sharply criticized the protection of the Sackler family. It’s not perfect for me, it’s not perfect for anyone, ”she said.

But in July, after Sackler’s family paid more and agreed to do so sooner, Healy and the majority of the other attorneys general began to agree to the plan. Purdue has also agreed to release millions of company documents, including those normally protected by attorney / client privileges.

Connecticut Attorney General William Tong is still opposed to the deal.

“This is part of the worst corporate fraud we have ever seen. It’s not just about trading, making as much money as possible, or getting out of Dodge. He does justice and holds them accountable. “

Professor Anthony Casey of the University of Chicago Law School said those angry with the judge over the release of a third party may not be immersed in bankruptcy law. The judge does. “

Purdue Pharma Owners’ Legal Shield is at the Heart of the Attraction | Job

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