Sacklers: Billions Raised Through Purdue Pharma, Not Bankruptcy Abuse | Bankruptcy News

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When it finally filed for bankruptcy in the face of lawsuits over the opioid epidemic, Purdue Pharma needed the Sacklers’ money to settle the billions of dollars in legal claims. In return, the Sacklers may have demanded protection from lawsuits.

Members of the Sackler family said on Monday that the billions of dollars they raised from Purdue Pharma before the company filed the Chapter 11 case in the United States was the result of the extra money, and was not making part of a “secret plan” to abuse the bankruptcy system.

In court documents, lawyers for members of the Sackler family, who controlled Purdue Pharma, rejected U.S. District Judge Colleen McMahon’s suggestion that the more than $ 10 billion the company paid in the years leading up to the 2019 bankruptcy could constitute abuse of the chapter. 11 process. About half of the money went to taxes or business investments, according to court documents.

The Sacklers would have drained Purdue Pharma of its cash for several years. When it finally filed for bankruptcy in the face of lawsuits over the opioid epidemic, the company needed the Sacklers’ money to settle the billions of dollars in legal claims. In return, the Sacklers may have demanded protection from lawsuits.

The Sacklers rejected the idea that there was any “ploy” to “deliberately weaken Purdue so that he cannot reorganize without” their financial contribution.

There is no evidence to suggest the payments “were made under a secret plan” to abuse the bankruptcy system, Sackler’s lawyers said. They called the idea “pure fiction”.

McMahon is considering overturning a bankruptcy court ruling that shields the Sacklers from liability regarding the opioid epidemic. If she finds there is sufficient evidence of abuse, she could send the case back to bankruptcy court to reconsider the shield.

More than 500,000 people have died of opioid overdoses since 1999, according to the United States Centers for Disease Control and Prevention.

The payments, according to the Sacklers, were made as the business grew, including increased revenue following the reinstatement of Purdue Pharma’s patent for OxyContin in 2008.

The Sacklers, who have denied doing wrongdoing and did not file for bankruptcy themselves, contributed an estimated $ 4.5 billion to settle an opioid-related dispute in return for protection against future lawsuits.

Purdue Pharma argued in a separate filing Monday that the protections are needed because the company cannot come out of bankruptcy without resolving the opioid-related claims against itself and the Sacklers.

The US Department of Justice’s bankruptcy watchdog, the US Trustee, has long opposed such litigation protection and said in court on Monday that the law offers no such protection to people. who had not filed for bankruptcy.

The American trustee accused the Sacklers of “grafting” on the bankruptcy of Purdue Pharma to protect themselves.

“If it is not about abuse of the bankruptcy system, we do not know what it is,” said the US trustee.



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