The Sacklers should not be shielded amid bankruptcy, AGs argue.
New York Attorney General Letitia James and 23 AGs from other states submitted papers in bankruptcy court asking for lawsuits to continue against nine members of the infamous Sackler family behind OxyContin’s Purdue Pharma. The state AGs said, “Protecting the family members, who haven’t declared bankruptcy themselves, gives the impression that wealthy people can avoid having to answer for alleged wrongdoing.”
The lawsuits have been on hold since October of last year, when the judge overseeing the Chapter 11 proceedings extended Purdue’s status to the Sacklers themselves.
In filing for Chapter 11, the company indicated, “Absent [bankruptcy] protection, this case will fail because the fundamental goal of this and any bankruptcy will have been thwarted.”
“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 representative said.
Purdue and the Sacklers have steadfastly denied any wrongdoing, and under the proposed deal, they would relinquish ownership of the company and contribute $3 billion to communities in need of drug addiction services.
Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, NY, shielded the family from answering in other jurisdictions, and the injunction is scheduled to expire on April 8. Purdue is seeking to extend this another provision another six months with a new expiration date of October 5.
The Sacklers collected at least $10 billion since 2008, and James said she discovered an estimated “$1 billion in wire transfers between the Sacklers, entities they control and different financial institutions, including those that have funneled funds into Swiss bank accounts.”
“These decades-old transfers were perfectly legal and appropriate in every respect,” a statement from the family’s representative said.
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.”
When Purdue filed for bankruptcy amid settlement negotiations, Massachusetts’ Maura Healey, one of the state AGs, wrote for The Washington Post, “The Sacklers would like us to believe that as part of the settlement they’re cutting a check for billions of dollars. They’re not. After ravaging communities across the country and making billions off OxyContin sales, their proposed settlement likely wouldn’t require the Sacklers to pay back a dime of the money they made from Oxycontin sales over the past few decades.” She also noted, “Our case against Purdue and the Sacklers is based on years of investigation, sworn testimony, death certificates, prescription records and thousands of internal company documents that Purdue kept secret until we brought them to light. We uncovered a scheme designed to get more patients on opioids at higher doses for longer periods of time. That scheme put patients and families at risk so that the Sacklers could pocket billions of dollars.”