Judge puts temporary stop to Purdue lawsuits — with CT’s blessing
A federal bankruptcy judge in New York on Wednesday extended a temporary halt to the opioid lawsuits Connecticut and other states have brought against Purdue Pharma and members of the Sackler family.
Connecticut is among a group of 24 states that rejected a settlement proposed by Purdue Pharma, the Stamford-based maker of OxyContin, and the Sackler family shortly before the company filed for bankruptcy on Sept. 15. The states wanted to continue their lawsuits against Purdue and the Sacklers instead.
But in a filing earlier this week, Connecticut and the other dissenting states said they are making progress in their discussions regarding access to Sackler financials and consented to extend the new temporary halt to the lawsuits.
“The States believe that each of these efforts has the potential for achieving meaningful progress in the next several weeks that will benefit the public and the bankruptcy case,” the filing said.
Bankruptcy Judge Robert Drain on Wednesday continued a temporary halt to all state lawsuits against the company and Sackler family until December 19. A previous temporary halt to the lawsuits expired Wednesday.
“This short-term extension will keep pressure on the Sacklers to disclose their financial information to the states. We intend to use every day of this extension to aggressively fight for that information.”
CT Attorney General William Tong
The agreement to the temporary injunction is voluntary through Dec. 19. If an agreement between the parties is not reached to extend the injunction, they court could impose a longer lawsuit ban. Other states have agreed to halt their lawsuits until April 8.
It is not unusual for bankruptcy judges to halt lawsuits against companies or individuals who file bankruptcy, but it is unusual for that protection to extend to related parties who haven’t filed bankruptcy. Drain has called his order halting those lawsuits “extraordinary” but said it was necessary to preserve resources needed for the settlement.
Connecticut Attorney General William Tong said Wednesday the dissenting states would use the time to seek out more financial information about the Sacklers. The states that have rejected the settlement say the family has made more money than it has disclosed from the sale of OxyContin and that a significant amount of that money has been moved offshore.
“This short-term extension will keep pressure on the Sacklers to disclose their financial information to the states,” Tong said. “We intend to use every day of this extension to aggressively fight for that information.”
The company and the Sackler family have offered a settlement valued at between $10 billion to $12 billion, saying it would establish a non-profit entity that would make and distribute overdose rescue drugs.
Opponents of the settlement noted that those drugs have yet to be approved by the Food and Drug Administration, and other forms of overdose rescue drugs are already widely available.
The proposed settlement also sets out a minimum $3 billion to be paid over seven years by Sackler family members, derived in large part from the sale of the family’s overseas drug companies.
That offer of Sackler family money is not considered to be enough for Connecticut and the other dissenting states, although 23 other, mostly Republican-run states, accepted the terms of the settlement offer.
OxyContin has been blamed as a major driver of America’s opioid epidemic and makes up about 90% of Purdue Pharma’s sales.
But Purdue Pharma and the members of the Sackler family involved with the pharmaceutical company say they are not to blame for the nation’s opioid epidemic.
Purdue has also promised, while the injunction on lawsuits is in place, to refrain from marketing opioids or lobbying on behalf of pain killers.
“The company shall not engage in promotion of the treatment of pain in a manner that encourages the use of opioids or opioid products,” a company court filing said.
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