Supreme Court Reviews Controversial $6 Billion Settlement Protecting the Sacklers

( – A Supreme Court battle over a bankruptcy deal saw heated arguments on Monday, December 4th, involving Purdue Pharma.

The Sackler family, who formerly owned the pharmaceutical firm, agreed to pay $6 billion in 2022 after it admitted its role in selling the addictive and widely misused drug OxyContin. The agreement, which saw the payment go towards addressing opioid addiction, saw the family given immunity by a bankruptcy court in all following civil cases.

The Department of Justice has argued that the court did not have the authority to make such a ruling, and has appealed the case to the Supreme Court. On Monday, lawyers for the DOJ claimed that the deal conflicted with bankruptcy law.

In 2019, Purdue Pharma filed for bankruptcy. However, the Sacklers never did, despite being granted immunity often reserved for major companies that declare bankruptcy yet still are faced with mass injury claims. The family has made millions of dollars through OxyContin, a highly addictive painkiller.

While the Sackler family themselves are far from beloved by affected families, many have supported the deal, prompting questions from Supreme Court justices as to why the government was seeking to overturn the “prompt payment” to victims’ families. In compensation, most families will receive between $3,500 to $48,000 each.

Court documents show that more than 2,600 claimants opposed the deal in a vote, with “hundreds of thousands” not voting at all. For some with stronger claims, victims’ families could receive a “much, much bigger payoff” by rejecting the deal, according to bankruptcy professor Ralph Brubaker at the University of Illinois.

Ultimately, the high-profile case is important due to the major implications of the final decision.

If the Supreme Court rules against the government, third-party entities that did not file for bankruptcy could be issued immunity through the bankruptcy courts. If it rules in the DOJ’s favor, then wealthy benefactors may need to be more careful going forward, particularly in the pharmaceutical industry.

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