The Supreme Court is hearing arguments on a bankruptcy plan from Purdue Pharma that would protect the Sackler family.
This article was published prior to the Supreme Court’s hearing of arguments in the Harrington v. Purdue Pharma L.P. case. Here is a summary of those arguments.here.
Ellen Isaacs had been raising concerns about the opioid epidemic long before the Sackler family and their involvement in the crisis were brought to the public’s attention through shows like “Dopesick” and “Painkiller.” Even before her son passed away at the age of 33 from a drug overdose, Isaacs was warning about the devastation caused by opioid addiction.
Isaacs personally received a prescription for OxyContin, a potent pain reliever produced by Purdue and marketed as “non-addictive,” following her surgery in the late 1990s. This was also when her son, Ryan Wroblewski, was prescribed the medication after hurting his back in a bridge fall.
Narcan is a nasal spray that is utilized to assist individuals who are suffering from an opioid overdose. It has been featured in the news in order to showcase its effectiveness.
While advocating for her cause, Isaacs held a protest outside of the Justice Department. She also sent a letter to the late Queen Elizabeth II, urging her to revoke the title of Theresa Sackler, who was married to…Purdue co-owner Mortimer Sackler
She regained her “dame” status in White Plains, New York, where a federal bankruptcy judge presided over Purdue’s bankruptcy and granted legal safeguards for the Sackler family.
Isaacs came back to Washington on Monday in her fight against the bankruptcy proposal and, specifically, the choice to absolve the Sacklers from responsibility for the opioid crisis. The case, known as Harrington v. Purdue Pharma L.P., was heard by the Supreme Court on Monday morning and is currently under review.
Isaacs emphasized the significance of ensuring that these individuals are held responsible for the lives they have taken. In her statement to CBS News, she stated that they are criminals and should be treated as such.
Douglas Healey / AP
settlement
The agreement reached by Purdue Pharma to address their bankruptcy.
Purdue
I submitted a petition for legal protection under Chapter 11 of the bankruptcy code. in September 2019. Scores of states, local governments, Native American tribes and victims had filed lawsuits against the company seeking damages arising from its manufacture and sale of OxyContin, which helped fuel the opioid epidemic. Purdue separately pleaded guilty
In 2007, they pleaded guilty to a felony charge of mislabeling OxyContin and have since paid over $600 million in penalties and additional expenses.
Though the Sackler family, which owned Purdue, did not enter bankruptcy, they negotiated a settlement with claimants. The Sacklers agreed to contribute more than $4 billion across a decade — an amount that ultimately rose to $6 billion — toward efforts to fight the opioid crisis. The settlement also includes $750 million to compensate victims, who may be eligible to receive between $3,500 and $48,000.
The contract mandates the disclosure of numerous documents and for Purdue to transform into a company that benefits the public, using its earnings to develop products that fight opioid addiction.
As part of the agreement, the plan also provided protection for the Sackler family from being sued in civil court for their involvement in the opioid epidemic. Additionally, the family may retain a significant amount of profits from Purdue that were earned between 2008 and 2017, as mentioned in legal documents.
The majority of victims, 95%, agreed to the bankruptcy plan. However, there were a few who opposed it, including certain states, Canadian cities, indigenous tribes, and over 2,600 individuals. Their opposition was due to the legal safeguards in place for the Sackler family, their associates, and connected organizations.
In September 2021, a bankruptcy court in New York gave its approval for the plan. However, the states and other critics contested this decision in a federal district court also located in New York. The U.S. Trustee, which is responsible for overseeing bankruptcy cases, also joined in the challenge.
The group honed in on the legality of the plan’s protection for the Sacklers, as even those who did not agree to the deal are unable to take legal action against them. A federal district court concurred.and in December 2021
The plan was rejected.
Purdue and other supporters of the plan filed an appeal with the U.S. Court of Appeals for the 2nd Circuit. During this time, the District of Columbia and eight states who had opposed the deal came to an agreement with Purdue and the Sacklers. This agreement stated that they would increase their proposed contribution to the bankruptcy estate by $1.75 billion, resulting in a total contribution of $5.5 billion to $6 billion.
After a divided panel on the 2nd Circuit overturned the district court’s ruling in May, the Justice Department requested that the Supreme Court review the appeals court’s decision and temporarily suspend the bankruptcy plan. The Supreme Court then took action.agreed to pause the plan
In August, it was announced that the case would be taken.
Carolyn Kaster / AP
A split or division among those who have been harmed.
The question being deliberated by the court is whether those who oppose federal bankruptcy settlements can be obligated by releases that protect parties who have not filed for bankruptcy, such as the Sacklers.
Anthony Casey, a law professor at the University of Chicago, stated that the court is questioning whether the code should specifically permit or forbid these types of releases.
The U.S. Trustee, on behalf of the Justice Department, contends that the decision to shield the Sacklers, who did not declare bankruptcy, from civil lawsuits goes against federal regulations. The government is urging the Supreme Court to deny the proposed arrangement.
The situation has divided individuals impacted by the opioid epidemic and families who have experienced the loss of a loved one due to overdoses. A collective of over 60,000 individuals affected by Purdue’s opioid products stated that the proposed settlement marks a significant turning point and provides the most viable option for seeking justice against Purdue.
The individuals affected by this situation, with the exception of one who has filed for personal injury, are in favor of the proposed plan and the releases. They desire closure and do not want to engage in never-ending, harmful, and likely pointless legal battles against the Sackler family. This was conveyed to the justices in a document.
Likewise, a group of 15 individuals who have been affected by the opioid crisis, either as victims themselves or through their loved ones, expressed to the judges in a document that the bankruptcy proposal endorsed by the 2nd Circuit Court of Appeals “offers the only feasible solution for providing victims with the necessary assistance, which is urgently needed,” and will contribute to allocating more resources towards addressing and preventing the opioid epidemic.
According to the individuals speaking, no sum of money can reverse the loss of a cherished family member due to addiction or undo the harm often caused by opioid addiction. However, the approved restructuring plan is crucial and must be implemented promptly to offer financial aid to those who have long endured the consequences of the opioid crisis. It is also necessary to prevent further families and communities from experiencing similar tragedies.
However, Isaacs, who opposes the plan, argued that she should have the right to present her own case against the Sacklers in a trial with a jury of her peers.
According to her, there are multiple relatives of Purdue’s board members involved in creating a product that has led to the deaths of at least 1 million people. However, there is no one taking responsibility for this situation.
Isaacs remembered receiving her ballot for voting on the proposed plan, which advised a vote in favor. She expressed disbelief that someone would attempt to speak on her behalf.
She expressed, “It’s completely incorrect. I desire to spend my day with Richard Sackler.”
Attorney Michael Quinn stated that the Sacklers’ release is a form of special protection that is not granted to others.
“The Sacklers have the opportunity to avoid responsibility due to these releases, while individuals like us and Ellen do not possess the means to do so,” he stated. “We do not have the financial resources to force a failing company into bankruptcy and then use it as a shield.”
According to him, the third-party releases in question enable corporate leaders and decision-makers to evade accountability for risky choices.
Quinn stated that if the Supreme Court upholds these nondebtor releases, it would allow companies to act without consequences and individuals would always escape punishment.
Toby Talbot / AP
on the outputs
The effects of a choice on the results.
According to Casey, third-party agreements are frequent in significant Chapter 11 bankruptcies. They cautioned that if the court ultimately denies Purdue’s bankruptcy proposal and declares these safeguards as invalid, it could impact the entire bankruptcy process. A ruling is anticipated by the summer.
According to Casey, there are numerous mass tort cases that are still unresolved. The parties involved were anticipating and relying on third-party releases, which now require further consideration.
In 2020, the Boy Scouts of America filed for Chapter 11 bankruptcy after facing multiple lawsuits accusing them of sexual abuse. In April, the organization successfully completed their bankruptcy process with a reorganization plan that received approval from 85% of survivors who voted. This plan was then confirmed by a bankruptcy court and a federal district court.
The agreement made by the Boy Scouts includes a trust with almost $2.5 billion in cash. This trust also provides releases for nonprofit local councils, chartering organizations, and other third parties. As a result, victims have started receiving payments from the trust. However, the group has expressed concern in a filing that if the Supreme Court determines that these third-party releases are not permitted under the bankruptcy code, it could have severe consequences for both victims and important nonprofit institutions in cases of mass tort.
The U.S. Conference of Catholic Bishops also requested that the court support the 2nd Circuit’s ruling, citing the exemption clauses included in the reorganization plans of many dioceses that declared bankruptcy due to lawsuits involving allegations of sexual abuse.
“The group, comprised of Catholic bishops, expressed their remorse for abuse within the Church and recognized the importance of providing compensation to victims. However, they argue that the Bankruptcy Code has traditionally provided a just, organized, and lawful means for the Church to navigate the overwhelming mass tort liability it currently faces and continue carrying out its mission. They urge the court not to impede this pathway in the present case.”
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Source: cbsnews.com