Rejection of Bankruptcy Appeal can be done by Purdue

Purdue Pharma was allowed to appeal a federal judge’s decision to reject legal protections for Sackler family members who own the OxyContin producer, which were a key part of the company’s Bankruptcy reorganisation plan. Purdue will have another chance to retain a $4.5 billion opioid litigation settlement at the centre of its strategy, thanks to U.S. District Judge Colleen McMahon’s decision.

Purdue has until January 17 to submit an appeal with the 2nd U.S. Circuit Court of Appeals in New York. In December, McMahon overturned a Bankruptcy judge’s approval of the deal. The agreement includes nondebtor releases, which protect the Sacklers from future opioid-related litigation. Several states, as well as the US Department of Justice’s monitor, protested the releases, claiming that the Sacklers should not be given such safeguards because they did not file for Bankruptcy themselves.

The appeal should be handled expeditiously, according to McMahon, “given the urgency of the opioid problem and the centrality of the issue to the conclusion of this case.” In the face of hundreds of lawsuits accusing it and the Sacklers of exacerbating the opioid epidemic through misleading marketing, Purdue filed for Bankruptcy in 2019. In exchange for the releases, the Sacklers committed $4.5 billion to the settlement, notwithstanding their denials of involvement.

Settlement cash would be put toward opioid abatement programmes under Purdue’s reorganisation plan. A lawyer for many states objecting to the expedited appeal did not respond to a request for comment right away. The Sacklers’ representatives either declined to comment or did not react to a request for comment right away. While the appeal is pending in the courts, Purdue and the Sacklers are in mediation with the states that rejected the releases in the hopes of reaching a new agreement that, if obtained, would effectively end the case.