The U.S. Supreme Court on Thursday blocked a bankruptcy settlement involving OxyContin maker Purdue Pharma, which would have shielded the wealthy Sackler family owners from lawsuits related to their role in the nation’s opioid epidemic. The 5-4 decision reverses a lower court ruling that had upheld the plan, which included... Read More »
The Billionaire Sackler Family Increases Settlement Offer to $6 Billion, Insisting on Immunity as Part of the Deal
The national ongoing pharmaceutical lawsuits are experiencing larger settlements, as the Sackler Family, owners of Purdue Pharma, just announced they would offer a new settlement of up to $6 billion. The offered settlement also would provide immunity to the Sackler family from the numerous lawsuits brought against them in the civil suits against Purdue Pharma.
The December ruling that overturned the settlement of $4.5 billion resulted after eight states plus the District of Columbia rejected the settlement, due to a provision included that would grant immunity to the Sackler family from civil lawsuits.
Simultaneously, the New York Attorney General Letitia James announced at the time that she had discovered wire transfers of $1 billion that were undisclosed during the initial negations toward a settlement. After an investigation, James released 33 subpoenas to financial institutions and then alleged the Sackler family had tried to hide the $1 billion.
“While the Sacklers continue to lowball victims and skirt a responsible settlement, we refuse to allow the family to misuse the courts in an effort to shield their financial misconduct,” James said in a statement.
Purdue, located in Stamford, Connecticut, is bankrupt, and the Sackler family is pushing for the new settlement in order to propel the Pharma company out of bankruptcy.
US Bankruptcy Judge Shelley Chapman said these settlement funds would be given to help stem the opioid crisis, provide support, and offer services to victims and their families.
Purdue is now appealing that ruling. In a published statement, Purdue Pharma said, “We remain focused on achieving our goal of providing urgently needed funds to the American people for opioid crisis abatement. We believe a global settlement is the swiftest and most cost-effective exit path from Chapter 11 and we will continue working to build consensus as we proceed through the appeal process with the United States Court of Appeals for the Second Circuit.”
After the initial settlement of $4.5 billion was overturned in the Purdue bankruptcy settlement in December, the payout figure has now grown significantly larger, by about $1.5 billion.
The Sackler family beefed up their settlement to resolve allegations against them after a mediator’s report on Friday claimed their product OxyContin and its manufacturers led to the deaths of a record number of US citizens during the opioid epidemic.
Beyond the historic, $6 million settlement figure, the Sackler family’s insistence on being granted immunity from lawsuits by families across the US is a sticking point in these settlement proposals. Plaintiffs are not happy with the idea of letting the family off the hook and are seeking damages in their civil lawsuits.
Among corporate lawsuits, it is common for firms in bankruptcy to be granted immunity; however, it is not the norm for any owners not filing for bankruptcy to be granted immunity.
The new $6 billion offer from the Sackler family is still not approved in full by all the states involved. Mediator and Judge Shelley Chapman shared a report about the new settlement, stating a “supermajority” but not all of the states, such as Connecticut, Washington, California and Maryland, have agreed to sign the new deal.
The payout for this large settlement would come from the Sackler family and Purdue Pharma. It would be staggered, with $6 billion tied into the sale of the company’s international pharma firms. The timing of the payout would be upon the closing of the sale of the international pharma firm, with the additional, newly added $1 billion paid out within eighteen years.
As these negotiations are underway, the court just extended a stay for both the Sackler family and Purdue Pharma against any litigation until March 3.
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