that upended a $6 billion opioid settlement just made it more difficult for owners of any company to use federal bankruptcy proceedings to shield themselves from legal peril.
In the 5-4 decision, the court said that no provision within the US Bankruptcy Code permits the type of agreement that the Sacklers and the company tried to reach.Purdue filed for bankruptcy protection in September 2019 under the pressure of thousands of lawsuits blaming it for fueling the opioid crisis, but none of the Sackler family members declared bankruptcy.
“Fearful that the litigation would eventually impact them directly, the Sacklers initiated a ‘milking program,’ withdrawing from Purdue approximately $11 billion — roughly 75% of the firm’s total assets — over the next decade,” the opinion stated. "This will likely cause bankruptcy courts to be more circumscribed in their approach to using their equitable powers," Morgan said.Purdue was driven into bankruptcy largely due to hundreds of thousands of lawsuits that successfully alleged the company and its affiliates lied about the addictive nature of OxyContin.
The multi-billion dollar fund was meant as compensation for both individual opioid-related deaths and injuries and to establish government aid programs to combat opioid addiction.