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The Supreme Court temporarily blocked Purdue Pharma, the makers of OxyContin (a highly addictive Opioid) from moving forward with bankruptcy proceedings and a $6 billion settlement. The bankruptcy plan was originally approved by a federal appeals court in New York and has received strong criticism since.
The settlement would have widely shielded the Sackler family, the previous owners of Purdue Pharma, from any future liability and Opioid-related lawsuits aimed at them.
The Biden administration requested the Supreme Court put the case on hold after receiving inquiries from a US Trustee, part of the Department of Justice, who questioned the authority of state and lower courts being able to make such large decisions resulting in widespread consequences.
The Supreme Court agreed to temporarily block proceedings and hear arguments in the case, scheduled for December.
The Sackler family is not new to controversy.
While never having any criminal charges pressed against them (and claiming their innocence), critics say the family played an unapologetic role in the pushing and promoting of Opioids, even while knowing the dangers of the ongoing Opioid epidemic.
The family is also being called out for their decision to sell Purdue Pharma only after they withdrew billions of dollars from the company before it filed for bankruptcy.
Criticism of the settlement highlighted that wealthy members of the Sackler family, who are not personally bankrupt, were included and broadly protected in the case. It is important to note, however, that the settlement would not protect individual family members from criminal charges from the government if the government chose to pursue them.
A company using bankruptcy to protect themselves legally is not a new tactic, seen most recently by Johnson & Johnson. Companies use bankruptcy clauses (and cash offers) to limit their liability and get legal protection for the future.
This is what the Supreme Court wants at the center of the December hearings, as members of both sides of Congress condemn this practice. A representative for the Supreme Court ordered all parties to prepare arguments around one question: “Does US bankruptcy code allow courts to approve deals, as part of a Chapter 11 filings, that extinguish claims against third parties that aren’t bankrupt?”
The ultimate decision will hold great weight and dictate how large companies can use bankruptcy filings in the future and will decide on the responsibility that Purdue Pharma and the Sackler family must take for their role in the Opioid crisis.
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In 2007 and 2020, Purdue Pharma pleaded guilty to federal charges claiming that the company was intentionally deceptive in its marketing tactics and downplayed the addictive properties of OxyContin. Public health experts claim that OxyContin has played an irreparable part in the Opioid crisis, which is credited with over 80,000 overdose deaths in the US in 2022.
If you or a loved one is struggling with an addiction to OxyContin or other Opioids, help is available. Explore our rehab directory or contact a treatment provider today to explore your treatment options.
Jessica Sherer earned her B.A. in English from Ashford University and has over eight years of copyediting experience in healthcare education. Dedicated to providing clear and useful information, she hopes her work will help to support those affected by addiction.