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Purdue Pharma’s Bankruptcy Plan: JD, 3 States File Appeal

Following the approval of Purdue Pharma’s bankruptcy plan by a federal bankruptcy judge, A division of the Justice Department has filed an appeal to block the bankruptcy plan, which Purdue values at more than $10 billion.

The appeal was filed by the Justice Department division that serves as a watchdog for the federal bankruptcy system. The division has repeatedly criticized the part of Purdue Pharma’s bankruptcy plan that releases the company’s owners, the Sackler family, from liability for any future opioid litigation. 

Under the settlement deal, the Sacklers, who did not file for bankruptcy, were granted releases from opioid litigation liability after agreeing to pay about $4.3 billion of their personal wealth. 

Two divisions of the Justice Department in July described the bankruptcy settlement as flawed and unconstitutional. 

William Harrington, the U.S. trustee for the Justice Department, filed documents requesting an expedited stay to block implementation of the settlement, according to NPR. In an earlier filing, Mr. Harrington accused the Sacklers and their associates of using the bankruptcy system to avoid liability for their role in the opioid crisis, NPR reported. 

In the Sept. 15 court documents, attorneys for the Justice Department said they’re concerned that some provisions of the settlement may be implemented before the department can properly appeal the bankruptcy plan, according to NPR. The department requested an expedited hearing within the next two weeks. 

The states of Maryland, Washington as well as Washington D.C., have also filed appeals of the deal according to reports

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