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Judge Pushes Back On Protections For The Sacklers In The Purdue Pharma Bankruptcy

Kathe Sackler, a member of the family that owns Purdue Pharma, testifies via video in December 2020 to a House Oversight Committee hearing in Washington. Sackler was one of four members of her family to testify this week at U.S. Bankruptcy Court at a hearing over a reorganization plan for Purdue.
Kathe Sackler, a member of the family that owns Purdue Pharma, testifies via video in December 2020 to a House Oversight Committee hearing in Washington. Sackler was one of four members of her family to testify this week at U.S. Bankruptcy Court at a hearing over a reorganization plan for Purdue.

A federal bankruptcy judge says he'll rule Friday on the fate of Purdue Pharma and its owners, members of the Sackler family, who are at the center of a national reckoning over the deadly opioid epidemic.

Judge Robert Drain signaled he is likely to approve the reorganization plan for the makers of OxyContin.

But he also demanded last-minute changes limiting legal immunities granted under the deal to the Sacklers and their associates.

The Sackler family's settlement heads off additional lawsuits

Members of the family say they did nothing wrong but have agreed to pay roughly $4.3 billion and give up ownership of their bankrupt company.

In exchange they demanded sweeping legal protections for themselves and hundreds who worked with them.

As written, the settlement would block a wide range of civil suits relating to the Sacklers' long involvement with Purdue Pharma.

In a heated exchange, Drain said the releases would cover potential misconduct that has nothing to do with Oxycontin sales or opioids.

"I don't see why we're covering them in the release for non-opioid conduct," Drain said. "Why? There's no money being paid [by the Sacklers] for that."

Gerard Uzzi, an attorney representing one branch of the Sackler family, objected to the change.

He said the family had offered up billions of dollars of their private wealth as part of negotiations while making it clear they sought broad immunity.

"The goal was global peace, a complete and clean separation from all civil liability. That's in the record," Uzzi said.

The bankruptcy judge said the plan is too easy on the Sacklers

But Drain pushed back, shouting at one point that the plan would have to be rewritten with narrower releases from liability for the Sacklers.

"I'm not giving them that release, it's not going to happen. You're not going to persuade me on this," Drain said.

Regardless, while the details and scope of the settlement are expected to change ahead of Friday morning's ruling, it appears all but certain the Sacklers will win approval for their most controversial demand: a clean legal slate for their alleged role in the opioid crisis.

Critics say the introduction of OxyContin in the late 1990s when members of the Sackler family served on the company's board helped usher in the opioid crisis.

More than than 500,000 people in the United States have died from drug overdoses, and millions more suffer from opioid use disorder.

Purdue Pharma has pleaded guilty twice to criminal wrongdoing in its marketing of OxyContin, first in 2007 and again last year. The Sacklers have never been charged and say they did nothing illegal or unethical.

During this bankruptcy trial, former Purdue Pharma board member Richard Sackler was asked whether he, his company or his family bore any responsibility for the opioid epidemic. Sackler answered, "No."

The settlement aims to get money for aid programs flowing

Supporters of this bankruptcy plan, including most state and local governments, say it will, if approved, channel billions of dollars of aid over the next decade to addiction treatment and health care programs.

Critics of the deal, including attorneys general for nine states as well as the U.S. Justice Department, say it fails to hold the Sacklers accountable and improperly denies people harmed by OxyContin the chance to sue the family directly.

Drain has rejected those arguments, suggesting repeatedly that without a settlement of this kind thousands of lawsuits against the Sacklers would move forward at the same time, creating legal chaos.

During Wednesday's hearing, however, Drain said harm caused by Purdue Pharma and OxyContin "will never be fully resolved or even partly resolved."

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