Letting the ultra-rich Sacklers use their company’s bankruptcy to shield them from opioid lawsuits sends the wrong message about the justice system, two dozen state attorneys general are arguing.
New York Attorney General Letitia James, along with her counterparts from California and 22 other states, filed papers in bankruptcy court seeking to resume lawsuits against nine members of the Sackler family, which owns OxyContin maker Purdue Pharma LP.
Protecting the family members, who haven’t declared bankruptcy themselves, gives the impression “that wealthy people can avoid having to answer for alleged wrongdoing,” a Thursday court filing said, the Wall Street Journal reported.
Those lawsuits have been on hold since October, when the judge overseeing the Chapter 11 proceedings extended the same shield to the family that Purdue has.
“Our family continues to believe that the bankruptcy reorganization process is the most efficient and effective way to reach a resolution that delivers critical resources to the individuals, families and communities most in need,” a Sackler spokesperson said.
Purdue has proposed settling thousands of lawsuits — filed by states, local governments and Native American tribes — that contend it helped fuel the opioid crisis through misleading marketing of OxyContin. Purdue and the Sacklers have denied that the company acted improperly. Under the proposed deal, the Sacklers would cede ownership of Purdue and contribute $3 billion to cover communities’ costs tied to drug addiction.
The protections for the Sacklers were put in place to encourage negotiations with the states that wanted a larger contribution and to slow down spending on legal fees.
Judge Robert Drain of the US Bankruptcy Court in White Plains, NY, shielded the family from answering in other jurisdictions for their alleged role in feeding the opioid crisis, hoping to build consensus for a deal.
The injunction shielding the Sacklers is scheduled to expire April 8. Purdue wants it extended another six months, until Oct. 5.
Since the ban on suing the Sacklers went into effect, Purdue has provided more definitive accounting of how much the family took out of the company over the years. The Sacklers collected at least $10 billion since 2008. James has accused them of hiding millions of dollars in Swiss banks.
The states said keeping the litigation pause in place “protects the Sacklers from accountability for conduct that is alleged to have caused injuries and death in every state in America.”
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