On Thursday December 16, a federal judge overruled a settlement that had released Sackler family members from civil lawsuits against Purdue Pharmaceuticals. The pharmaceutical company has been accused of helping increase the opioid epidemic in the U.S. by encouraging the prescription of OxyContin. This judgement will derail the bankruptcy proceedings of the pharmaceutical company.
District Judge Colleen McMahon said that the $4.5 billion settlement that had been proposed earlier in the year, could not move forward as it shielded the Sackler family from future liabilities that were related to OxyContin, which is the opioid manufactured by Purdue. The Sacklers are one among the wealthiest families in the nation.
The Sacklers had not filed for personal bankruptcy protection. Instead they asked that they should be shielded from opioid claims. They would contribute $4.5 billion, if they received immunity from claims.
Judge McMahon said that the bankruptcy code did not allow a judge to grant such a release and called it “the great unsettled question.”
A small group of states who had appealed the bankruptcy plan were pleased with the judgement. William Tong, the attorney general for Connecticut called it a “seismic victory for justice and accountability.”
In September, Reuters had reported that Judge Robert Drain had approved a settlement plan. According to the plan, Purdue Pharma would have been dissolved. Its assets would be run by a trust that would help in combating the opioid crisis.
The plan also removed the liability of the Sackler family after they donated $4.5 billion. Reports from various outlets said that the family had allegedly profited immensely through the sale of OxyContin and had reportedly sent several billions of dollars to offshore accounts.
The Department of Justice had also been against the deal. They called it “unlawful” and “unconstitutional.”
Purdue Pharma said that it would appeal the ruling. The Sackler family has not responded when asked for comment by various news outlets.
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