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In a landmark ruling Tuesday, a federal appeals court in New York cleared the way for a bankruptcy deal for opioid manufacturer Purdue Pharma.
The deal will shield members of the Sackler family, who own the company, from future lawsuits.
The 2nd Circuit Court of Appeals spent more than a year reviewing the case after a lower court ruled it was improper for Purdue Pharma’s bankruptcy deal to block future lawsuits against the Sackler family.
The Sacklers earned billions of dollars from the sale of OxyContin and other opioids.
This latest ruling overturns the lower court’s December 2021 decision and clears the way for a deal hashed out with thousands of state and local governments.
As part of the bankruptcy settlement, the Sacklers are expected to pay roughly $5 to $6 billion and give up control of Purdue Pharma.
Roughly $750 million from that payout will go to individuals across the U.S. who became addicted to OxyContin and to the families of those who died from overdoses.
Lindsey Simon, who studies bankruptcy law at the University of Georgia School of Law, described this ruling as a solid victory for proponents of the deal.
«It’s very clear that in the 2nd Circuit this kind of [bankruptcy] remedy is appropriate under certain circumstances,» Simon said. «There were some questions about whether it would be permitted going forward.
