Opioid crisis litigation: US Supreme Court halts Purdue bankruptcy plan
The court followed the view of the US Department of Justice that the Sackler family, who earned billions of dollars from the sale of the highly addictive painkiller Oxycontin, did not deserve such extensive protection. The Supreme Court's stance on the case was, however, divided: Its decision came with a majority of five to four judges.
The preliminary insolvency plan had already been suspended by the Supreme Court on the request of the Justice Department in August. This decision means that the plan must be completely renegotiated.
The Purdue Corporation, which is confronted with thousands of lawsuits due to the opioid crisis, filed for insolvency in 2019. The company then proposed a plan that would extend its resolution in the USA until 2024 and provide for a new corporate restructuring. The Sackler family pledged almost six billion dollars (5.6 billion Euros) over an 18-year period for the compensation of victims and their families and received in return the protection from civil lawsuits.
The parties to this agreement included all 50 US states, a multitude of local governments, and some of the plaintiff individuals. The Supreme Court objected to the fact that the Sacklers had not agreed to contribute anything to the agreement that approached their full assets. At the same time, they demanded full protection against all lawsuits, criticized Judge Neil Gorsuch.
The Sacklers had not filed for bankruptcy as private individuals. The Justice Department accuses them of withdrawing eleven billion dollars from companies for themselves in the years before Purdue's bankruptcy.
The insolvency plan for Purdue had caused heated debates in recent years. Critics argued that the Sackler family should not get away with it so easily. Others, however, held that the protection for the Sacklers was the only way to obtain urgently needed funds for communities and individuals affected by the opioid crisis.
Purdue and the Sacklers are accused of deliberately hiding the addiction risks of Oxycontin in their long-term marketing campaign. The mass prescription of the drug is considered the trigger for the widespread opioid addiction in the USA. In a period of two decades, more than half a million people in the USA died from opioid overdoses, including both prescribed painkillers and illegal drugs.
- The United States Department of Justice, in its legal dispute with Purdue and the Sackler family, argued against the insolvency plan's extensive protection for the Sacklers.
- The opioid crisis-stricken pharmaceutical company, Purdue, filed for insolvency in the USA, proposing an insolvency plan to extend its resolution until 2024.
- The Supreme Court, divided in its stance, followed the US Department of Justice's view on the insolvency plan, requiring a complete renegotiation.
- The preliminary insolvency plan, which included a compensation commitment from the Sackler family of almost 6 billion dollars, faced objections from the Supreme Court for not covering their full assets.
- The Ministry of Justice, along with 50 US states, local governments, and some plaintiff individuals, were parties to the agreement, critiquing the lack of Sackler family contribution to the agreement.
- The top pharmaceutical company, Purdue, and the Sacklers are the focus of a legal dispute in the US court due to allegations of deliberately hiding Oxycontin's addiction risks in its marketing campaign.
