Purdue Pharma filed for bankruptcy with a more than $ 10 billion plan to settle claims that it fueled the U.S. opioid epidemic by illegally promoting the sale of its addictive pain reliever, OxyContin. The company’s headquarters in Stamford, Connecticut can be seen here in 2019. Image: Victor J. Blue / Bloomberg / Getty Images
A division of the Justice Department that serves as a watchdog for the federal bankruptcy system appealed late Wednesday to block the controversial Purdue Pharma’s bankruptcy plan.
William Harrington, who serves as the US trustee for the Justice Department, also filed documents requesting an “expedited stay” to prevent the settlement from being implemented.
The deal that Judge Robert Drain approved September 1st, granted members of the Sackler family who own the pharmaceutical company extensive immunity from opioid lawsuits.
The Sacklers, who are not bankrupt, were released from liability after agreeing to bring roughly $ 4.3 billion of their personal wealth into the deal.
Proponents of the settlement, including most attorneys general, said it would avoid costly litigation while funding drug treatment programs over the next decade.
But during two-week bankruptcy proceedings and in court documents, the Justice Department has repeatedly blown the Sacklers’ indemnities as “unlawful” and “unconstitutional”.
In a previous filing, Harrington accused the Sacklers and their staff of using the bankruptcy system to avoid liability for “alleged misconduct in framing and sustaining one of the most serious public health crises the United States has ever seen”.
The introduction of OxyContin in the 1990s is widely considered to be one of the offshoots of an opioid epidemic that killed more than 500,000 people in the United States.
The Sacklers, who claim to have made more than $ 10 billion in opioid sales, have repeatedly said that they did nothing wrong and acted ethically.
In new court documents filed on Wednesday, Justice Department attorneys signaled they were concerned that some provisions of Purdue Pharma’s bankruptcy plan could be implemented quickly, making an appeal difficult.
“In seeking an appeal suspension, the aim of the United States trustee is to maintain the status quo for the duration of the appeal,” the document reads.
The Justice Department requested an accelerated hearing within the next two weeks. The states of Maryland and Washington and Washington DC have also appealed.
In approving Purdue Pharma’s bankruptcy earlier this month, the judge described it as the best possible solution to a case involving more than 600,000 parties who claim OxyContin harmed them.
“This is a bitter result,” said Drain during his September 1st ruling. “I believe that at least some of the Sackler parties are liable for it” [opioid OxyContin] Allegations. … I would have expected a higher severance payment. “
Purdue Pharma has pleaded guilty twice to federal crimes related to the marketing of OxyContin. The Sacklers who ran the company said they had done nothing criminal or unethical.
Under this agreement, if the Sacklers survived the appeal, they would again not recognize any wrongdoing.
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