Supreme Court Upends Purdue Pharma’s Opioid Deal — and Bankruptcy Law
The agreement had been slammed for not holding the Sackler family accountable. But without some incentive, they’d have no reason to settle.
So much trouble
Photographer: Eric Baradat/AFP/Getty ImagesIn a surprising twist to America’s ongoing opioid crisis, the Supreme Court has thrown out a legal settlement that would have paid billions of dollars to victims of over-prescription as well as all 50 state governments. Along the way, the court made it much harder than it has ever been before to settle large, complex mass tort cases with a bankruptcy agreement.
The court held that, while a bankrupt company like Purdue Pharma LP can be released from further liability under such a settlement, a bankruptcy settlement can’t release non-company parties like the Sackler family, the owners of Purdue, from future liability. That substantially removes the incentive of such parties to agree to a settlement — a problem likely to occur in many similar situations in the future.