Attorney General Tong Argues Sackler Family "Milked" Purdue in Calculated Strategy to Use Company Bankruptcy as "Haven" for Wrongdoing
States Ask Court to Reverse Bankruptcy Court Approval of Lifetime Liability Shield for Sackler Family(Hartford, CT) – Attorney General William Tong joined the attorneys general of four other states this week in a brief seeking the reversal of the Purdue bankruptcy order granting unprecedented lifetime legal immunity for the Sackler family.
The U.S. District Judge last week requested briefs specifically addressing whether the court should consider the Sacklers’ extraction of $11 billion from Purdue in the years leading up to its bankruptcy in determining whether the Sackler liability release abuses the bankruptcy process. The states argue the answer to that question is yes, and that the District Court should reverse the Bankruptcy Court decision.
Connecticut, California, Delaware, the District of Columbia, Maryland, Oregon, Rhode Island, Vermont, and Washington have appealed the controversial and unprecedented Bankruptcy Court decision that purports to extinguish Connecticut’s claims against both Purdue and the non-bankrupt Sackler family. The plan grants lifetime immunity to the Sackler family for civil opioid-related claims. Purdue’s bankruptcy plan requires the Sackler family to pay $4.3 billion- though they are worth multiple times that amount- over nine years to help abate the opioid crisis they fueled. By the time they are finished paying this settlement, the Sacklers will be wealthier than they were when they started.
“The evidence here shows that the Sacklers had a long-term, calculated strategy to use a Purdue bankruptcy as a haven for their own wrongdoing, to protect their vast opioid wealth from their many victims. Starting in 2007, as they became aware of the scope of their personal liability for lying about Oxycontin’s dangers, they began consulting bankruptcy experts about how to shield their assets. They then extracted billions of dollars from the company and moved it overseas, following advice they received from people involved in asbestos bankruptcies…The nonconsensual Sackler Release cannot be approved because it abuses the bankruptcy process. No remand is necessary for the Court to reach this legal conclusion,” the brief states.
From 2008 to 2010, the Sacklers took distributions of roughly seventy percent of Purdue’s revenues each year, and from 2011 to 2016 they took distributions ranging from forty to fifty-five percent each year. From 2008 to 2018, distributions totaled over $10.7 billion.
Click here for the full brief. Connecticut was joined in the brief by Delaware, Rhode Island, Vermont, and Washington.