What the Supreme Court’s Purdue Ruling Means, for Bankruptcies and More

The US Supreme Court striking down the $6 billion settlement between members of the Sackler family and Purdue Pharma LP — their bankrupt drugmaker, which makes the painkiller OxyContin — has many implications. While uncertainties remain for Purdue, the Sacklers and victims of opioid addiction, one certainty from the Court is that these kinds of settlements are no longer allowed in bankruptcies.

The 5-4 ruling determined that the settlement would improperly shield Purdue’s owners, the Sackler family — some of whom together own the company but unlike Purdue were not in bankruptcy. The outcome rejects their plan to pay $6 billion to Purdue, which would’ve released members of the family from pending and future civil lawsuits alleging their company and its sale of OxyContin helped fuel the nation’s addiction crisis. Justices Brett Kavanaugh, Sonia Sotomayor and Elena Kagan dissented, along with Chief Justice John Roberts.