Sackler family says billions collected from Purdue not abuse of bankruptcy law

Dec 6 (Reuters) – Members of the Sackler household on Monday mentioned billions of {dollars} they collected from Purdue Pharma earlier than the corporate filed for Chapter 11 was the results of additional money, not a part of a “secret plan” to abuse the chapter system.

In courtroom papers, attorneys for the Sackler members of the family, who managed Purdue, rejected U.S. District Choose Colleen McMahon’s suggestion that the greater than $10 billion Purdue paid out within the years main as much as the 2019 chapter may quantity to an abuse of the Chapter 11 course of. Round half of the cash went to taxes or enterprise investments, in keeping with courtroom paperwork.

The Sacklers are alleged to have drained Purdue of money over a number of years. When it will definitely filed for chapter within the face of lawsuits over the epidemic, the corporate wanted Sacklers’ cash to settle the billions of {dollars} of authorized claims. In return, the Sacklers have been in a position to demand safety from the lawsuits.

The Sacklers rejected the notion that there was any “scheme” to “intentionally weaken Purdue so it couldn’t reorganize with out” their monetary contribution.

There is no such thing as a proof to counsel the funds “have been made as a part of a secret plan” to abuse the chapter system, the Sackler attorneys mentioned. They referred to as the thought “pure fiction.”

McMahon is contemplating whether or not to overturn a chapter courtroom ruling that shields the Sacklers from legal responsibility over the opioid epidemic. If she finds that there’s adequate proof of abuse, she may ship the matter again to the chapter courtroom to rethink the protect.

Greater than 500,000 individuals have died from opioid overdoses since 1999, in keeping with the Facilities for Illness Management and Prevention.

The funds, the Sacklers argued, have been made as enterprise grew, together with elevated income following the restoration of Purdue’s patent for OxyContin in 2008.

The Sacklers, who’ve denied wrongdoing and didn’t file for chapter themselves, have contributed about $4.5 billion to a settlement of opioid-related litigation in alternate for defense in opposition to future lawsuits.

Purdue argued in a separate submitting on Monday that the protections are vital as a result of the corporate can’t exit chapter with out resolving opioid-related claims in opposition to each Purdue and the Sacklers.

The U.S. Division of Justice’s chapter watchdog, the U.S. Trustee, has lengthy opposed the sort of litigation protect and mentioned on Monday in courtroom filings that the legislation provides no such protections for individuals who haven’t filed for chapter.

The U.S. Trustee accused the Sacklers of “piggybacking” off Purdue’s chapter to guard themselves.

“If this isn’t abuse of the chapter system, it’s unclear what’s,” the trustee mentioned.

Reporting by Maria Chutchian; Modifying by Noeleen Walder, Bernadette Baum and Mark Porter

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