U.S. Judge Overturns Purdue Pharma's Ch.11 Confirmation

U.S. Judge Overturns Purdue Pharma's Ch.11 Confirmation

Introduction

Purdue Pharma's Chapter 11 confirmation that would have shielded its owners, the members of the Sackler family from opioid litigations and penalties, has been overturned by a federal judge.

U.S. District Judge Colleen McMahon ruled in a 142-page opinion that the New York bankruptcy court did not have the right to approve the $4.5 billion bankruptcy settlement that would protect the Sacklers from future opioid litigations.

Purdue's chairman responded to the ruling by stating that the company would appeal the decision, and the court's judgment would not affect the operations of the company's stability and ability to produce safe and effective medications to the consumers.

The Sacklers had even insisted on guaranteed legal protections in exchange for a $4.5 billion settlement that it will pay to resolve widespread opioid litigation.

Attorney General Merrick Garland supported the ruling as he feels the bankruptcy court does not have the right to deprive the opioid victims of their rights of suing the company that caused the opioid crisis. Even the Washington State Attorney General Bob Ferguson also praised the decision, who had earlier opposed Purdue's reorganization.

Ferguson even stated that justice would be the same for both ordinary Americans and billionaires and added that he is ready to fight the suit in the Supreme court if necessary.

The drugmaker's reorganization plan has been supported by 95% of the creditors, whereas eight states, Washington, D.C., Seattle and more than 2,600 personal injury claimants have opposed the move.

In September 2019, Purdue filed for bankruptcy considering the 3,000 lawsuits it faced and the opioid crisis that claimed 500,000 lives since 1999. The lawsuits allege that the company downplayed the addiction and overdose risks of opioids and aggressively marketed it for making profits. The company and the family members have denied all the allegations against them.