Supreme Court rejects Purdue Pharma's $6 billion opioid settlement

(WASHINGTON EXAMINER) – The Supreme Court on Thursday rejected Purdue Pharma’s proposed $6 billion bankruptcy settlement. A 5-4 majority opinion by Justice Neil Gorsuch sided with the Biden administration‘s argument that Purdue’s settlement is an abuse of bankruptcy protections meant for debtors in financial distress, not for the owners of the multibillion-dollar opioid company, the Sackler family, who withdrew $11 billion from Purdue before agreeing to contribute $6 billion to its opioid settlement.

The Sackler family’s plan to settle lawsuits and transform Purdue Pharma into a nonprofit organization dedicated to addiction treatment was initially approved by a bankruptcy judge in 2011. The U.S. Trustee Program, a Justice Department watchdog, intervened and claimed settlement terms required unanimous consent by the roughly 60,000 people who have filed personal injury claims, despite the plan’s approval by over 95% of the voting claimants.

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After years of litigation, the Supreme Court in August temporarily barred the pharmaceutical from moving forward with bankruptcy proceedings and agreed to hear Biden administration’s challenge to the plan on the merits.

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