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Purdue Pharma's Settlement Blocked; Opioid Crisis Accountability in Focus

Quiver Editor

The U.S. Supreme Court on Thursday blocked Purdue Pharma's bankruptcy settlement, which would have shielded the Sackler family from lawsuits related to their role in the opioid crisis. The decision reversed a lower court ruling and prevented Purdue's owners from gaining immunity in exchange for a $6 billion payment to settle thousands of lawsuits. The settlement aimed to resolve claims against Purdue for its misleading marketing as alleged in the lawsuits.

Conservative Justice Neil Gorsuch authored the ruling, which was supported by fellow conservative Justices Clarence Thomas, Samuel Alito, Amy Coney Barrett, and liberal Justice Ketanji Brown Jackson. Gorsuch emphasized that the Sacklers, not being bankrupt themselves, should not receive protections intended for debtors. This ruling marks a significant victory for the Biden administration, which challenged the settlement as an abuse of bankruptcy protections.

Market Overview:
  • U.S. Supreme Court blocks Purdue Pharma's bankruptcy settlement.
  • The decision prevents the Sackler family from gaining legal immunity.
  • The Biden administration challenged the settlement as an abuse of bankruptcy protections.
Key Points:
  • Conservative Justice Neil Gorsuch authored the ruling.
  • The settlement would have provided $6 billion to settle opioid crisis lawsuits.
  • The ruling is a victory for the Biden administration and some states.
Looking Ahead:
  • Purdue Pharma may need to renegotiate the settlement terms.
  • Potential legal battles for the Sackler family in the absence of settlement immunity.
  • Ongoing implications for the opioid crisis and compensation for victims.

Purdue Pharma filed for Chapter 11 bankruptcy in 2019 to address its debts, primarily from lawsuits related to its opioid product, OxyContin. The company's bankruptcy settlement, approved in 2021, promised $10 billion to creditors, including state and local governments and individual victims. However, the settlement's legal protections for the Sackler family were controversial and challenged by the Biden administration and some individual plaintiffs. Despite initial, most states eventually supported the settlement after the Sacklers increased their contribution to the fund.

The Supreme Court's decision to block the settlement means that the legal protections for the Sacklers are no longer in effect. This outcome is expected to lead to further negotiations or potentially more lawsuits against the family. The ruling has significant implications for the ongoing efforts to hold Purdue and the Sacklers accountable for their role in the opioid crisis. Several state attorneys general praised the decision, emphasizing the need for the Sacklers to provide compensation for the damage caused by the epidemic.

About the Author

David Love is an editor at Quiver Quantitative, with a focus on global markets and breaking news. Prior to joining Quiver, David was the CEO of Winter Haven Capital.

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