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Judge throws $ 4.5 billion into deal to protect Sacklers from opioid trials



(Reuters) – A federal judge overturned a $ 4.5 billion settlement that legally protected members of the Sackler family accused of helping incite the US opioid epidemic, a decision that threatened to overturn the bankruptcy of their company, OxyContin maker Purdue Pharma LP.

U.S. District Judge Colleen McMahon said in a written statement on Thursday that the New York Bankruptcy Court approving the settlement did not have jurisdiction to grant Sacklers legal protection from future opioid disputes that formed the cornerstone of Purdue's [Purdues19659002] Purdue said they would appeal the decision.

"Although the district court's decision does not affect Purdue's rock-solid operational stability or its ability to produce its many medicines safely and efficiently, it will delay, and perhaps end, the possibility for creditors. , communities and individuals. to receive billions in value to quell the opioid crisis, "said Purdue President Steve Miller in a statement.

Sacklers had insisted on the legal shields, so-called release of non-debtors, because they protect parties who have not filed for bankruptcy , in exchange for contributing $ 4.5 billion to resolve extensive opioid disputes.

Sacklers threatened to walk away from ttlement absent guaranteed legal protection.

Sacklers' representatives did not immediately respond to a request for comment late on

Attorney General Merrick Garland said in a statement that he was pleased with the verdict.

"The bankruptcy court did not have the power to deprive victims of the opioid crisis of their right to sue the Sackler family," said Mr. Garland. Prosecutor Bob Ferguson, who had opposed Purdue's reorganization, also praised McMahon's decision.

"There can be no two forms of justice ̵

1; one for ordinary ame rich and another for billionaires, "Ferguson said. "I am prepared to take this fight all the way to the Supreme Court, if necessary, to ensure real accountability to the Sackler family."

More than 95% of creditors Sacklers – voted to approve drug reorganization.

But eight states, Washington DC, Seattle and more than 2,600 personal injuries voted against Purdue's reorganization, Judge McMahon said. The U.S. Department of Justice's bankruptcy watchdog and Manhattan's U.S. Attorney's Office also opposed.

Judge McMahon asked questions about more than $ 10 billion Purdue distributed to Sacklers, which spanned an approximately decade-long period preceding the company's bankruptcy application.

Sacklers have faced charges that they have been charged. the financial transfers to prevent the money being drained in future litigation against Purdue. Sacklers has said that much of the money went to taxes and investments, as opposed to their pockets.

Judge McMahon's decision came a week after the Metropolitan Museum of Art and Sacklers, long known for their philanthropy, announced an agreement to remove the Sackler name from seven showrooms.

Purdue filed for bankruptcy in September 2019 before 3,000 lawsuits filed against accused the company and members of the Sackler family of having contributed to a public health crisis that has claimed the lives of some 500,009 people since 19009 people.

The dispute accused the company and its family members of aggressively marketing OxyContin while downplaying its substance abuse and overdose risks. The company and family members have denied the allegations.

U.S. Bankruptcy Judge Robert Drain of White Plains, New York, agreed early in Purdue's court restructuring to stop litigation against the company and Sackler's family members, who had not themselves applied for protection under Chapter 11.

The Stamford, Connecticut, the drug manufacturer last. year pleaded guilty to criminal charges arising from its handling of opioids. At the beginning of its bankruptcy case, Purdue said there were a number of lawsuits it could file in response to lawsuits alleging misconduct.

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