Us Supreme Court Blocks Purdue Pharma Bankruptcy Settlement – June 2024 Ruling

Purdue Pharma Bankruptcy Settlement Blocked

The U.S. Supreme Court has halted a significant bankruptcy settlement involving Purdue Pharma, the maker of OxyContin. This decision throws a wrench into the company’s deal aimed at resolving thousands of lawsuits linked to the opioid crisis. Purdue Pharma had proposed a plan to settle by offering payments from the Sackler family, who own the company. Under this plan, the Sackler family would contribute up to $6 billion in exchange for immunity from future opioid-related lawsuits.

The halt came after a request from opponents, including eight U.S. states, that argued the plan unlawfully shields the Sacklers. Those states contended that the family, who amassed substantial wealth from OxyContin sales, should face further litigation. Among other points, they disputed the fairness and legality of granting immunity without the consent of all parties involved. The case is significant because it could set a precedent for how corporations and their owners handle massive liabilities in bankruptcy settings.

Justice Sonia Sotomayor penned the order, noting the urgency for staying the bankruptcy proceedings. While many states supported the deal, arguing it sped up compensation to victims, the Supreme Court’s decision indicates a need for thorough legal examination. Critics were mainly concerned that the proposed settlement protected the Sackler family at the expense of real accountability. The opioid epidemic has caused over half a million overdose deaths in the U.S. since 1999.

Purdue Pharma filed for bankruptcy in 2019 seeking to manage the overwhelming litigation. The initial plan, approved by a federal bankruptcy judge, met fierce opposition from multiple fronts, including advocates for victims. Debates have intensified over how to balance compensating affected families while ensuring that those responsible don’t escape scrutiny. This event marks another chapter in the long-running legal battles over accountability and reparations tied to the opioid crisis.

Read the full story by: Reuters