Sacklers: Millions raised from Purdue Pharma do not abuse failure | Bankruptcy News

Eventually, when it filed for bankruptcy in the face of lawsuits over the opioid epidemic, Purdue Pharma needed Sackler’s money to settle billions of dollars in legal claims. In return, the prosecutors were able to seek protection from the lawsuits.

Members of the Sackler family said Monday they raised billions of dollars from Purdue Pharma before the company filed Chapter 11 in the United States as a result of extra money, not part of a “secret plan” to abuse the bankruptcy system.

In court documents, lawyers for the Sackler family who controlled Purdue Pharma ruled out U.S. District Judge Colleen McMahon’s suggestion that the company could have paid more than $ 10 billion in the years leading up to the 2019 bankruptcy. 11 process. About half of the money was spent on taxes or business investments, according to court documents.

Sacklers allegedly emptied Purdue Pharma of money for several years. Eventually, when it filed for bankruptcy in the face of lawsuits over the opioid epidemic, the company needed Sackler’s money to settle billions of dollars in legal claims. In return, the prosecutors were able to seek protection from the lawsuits.

The Sacklers ruled out a “scheme” to deliberately weaken Purdue so that it could not be reorganized without their financial contribution.

There is no evidence that the payments were “under a secret plan” to abuse the bankruptcy system, Sackler’s lawyers said. They called the idea “pure fiction.”

McMahon is considering whether to overturn the ruling that defends Sacklers from responsibility for the opioid epidemic. If he finds that there is sufficient evidence of ill-treatment, he may refer the case back to the bankruptcy court for reconsideration.

More than 500,000 people have died from opioid overdoses since 1999, according to the U.S. Centers for Disease Control and Prevention.

Payments, Sacklers argued, increased as businesses grew, including an increase in revenue after Purdue Pharma regained its OxyContin patent in 2008.

The Sacklers, who denied wrongdoing and did not file for bankruptcy themselves, have helped provide about $ 4.5 billion in the settlement of opioid-related lawsuits in exchange for protection against future lawsuits.

Purdue Pharma argued Monday that protections are necessary because the company cannot go bankrupt with opioid-related claims against itself and Sacklers.

The U.S. Department of Justice’s bankruptcy guardian, the U.S. Board of Trustees, has long filed a lawsuit against this type of lawsuit and said Monday in court records that the law does not provide such protection to people who have not filed for bankruptcy.

The U.S. Board of Trustees has accused the Sacklers of defending Purdue Pharma to protect themselves.

“If this is not an abuse of the bankruptcy system, it is not clear what it is,” the U.S. Board of Trustees said.