U.S. Judge Junks $4.50B Deal Shielding Sacklers From Opioid Suits

A federal judge has overturned a roughly $4.5 billion settlement that legally shielded members of the Sackler family who stand accused of helping fuel the US opioid epidemic, a decision that threatened to upend the bankruptcy reorganization of their company, OxyContin maker Purdue Pharma LP.

Photo Insert: The Sacklers are no longer protected from getting sacked by OxyContin suits.

US District Judge Colleen McMahon said in a written opinion on Thursday, the New York bankruptcy court that approved the settlement did not have authority to grant the Sacklers the legal protection from future opioid litigation that formed the linchpin of Purdue’s reorganization.

Purdue said it would appeal the decision, Brendan Pierson, Mike Spector and Maria Chutchian reported for Reuters.

"While the district court decision does not affect Purdue’s rock-solid operational stability or its ability to produce its many medications safely and effectively, it will delay, and perhaps end, the ability of creditors, communities, and individuals to receive billions in value to abate the opioid crisis," Purdue Chairman Steve Miller said in a statement.

The Sacklers had insisted on the legal shields, known as nondebtor releases because they protect parties that have not filed for bankruptcy themselves, in exchange for contributing $4.5 billion toward resolving widespread opioid litigation. The Sacklers threatened to walk away from the settlement absent the guaranteed legal protections.

Attorney General Merrick Garland said in a statement he was pleased with the ruling. "The bankruptcy court did not have the authority to deprive victims of the opioid crisis of their right to sue the Sackler family," Garland said. Washington State Attorney General Bob Ferguson, who had objected to Purdue's reorganization, also praised McMahon's decision.

“There cannot be two forms of justice – one for ordinary Americans and a different one for billionaires,” Ferguson said. “I’m prepared to take this fight all the way to the Supreme Court, if necessary, to ensure true accountability for the Sackler family.”

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