Lawmakers Debate Bill to Amend Bankruptcy Laws Protecting Purdue Owners
- Democrats denounce ‘loophole’ that benefits Sackler family members
- Purdue says he’s focused on bankruptcy reorganization plan
- Mass. AG says bankruptcy law is not meant to protect billionaires
(Reuters) – Democratic lawmakers on Tuesday called for the accountability of members of the Sackler family who own Purdue Pharma LP for their role in the national opioid crisis and argued for legislation that would change bankruptcy laws that , according to them, would wrongly benefit the Sacklers.
The United States House Committee on Oversight and Reform held a hearing to consider the SACKLER law, which aims to prevent non-bankrupt people from benefiting from legal protections in the event of a company’s bankruptcy.
The bill, sponsored by Rep. Carolyn Maloney, a Democrat from New York, was introduced earlier this year in response to the proposed settlement in Purdue’s Chapter 11 case, which frees members of the Sackler family from prosecution brought by states and municipalities that accuse the company and the family members that own it of fueling the opioid crisis through deceptive marketing of OxyContin. The bill has around 50 Democratic co-sponsors.
While it is common for owners, officers and advisers, among others, of a bankrupt business to receive discharges from future lawsuits through a Chapter 11 plan, supporters of the SACKLER Act claim that the Practice has created a loophole that allows Sacklers to escape responsibility for pushing OxyContin despite knowledge of its wrongdoing.
“This is a scandalous loophole formed by a group of bankruptcy judges,” Representative Jamie Raskin, a Democrat from Maryland, said at the hearing.
The opioid epidemic has claimed nearly 450,000 lives in the United States since 1999.
The families of Mortimer and Raymond Sackler said in a statement that the settlement ensures that billions of dollars for opioid reduction programs will be distributed faster than through litigation.
“If litigation resumes, we are confident the evidence would show that the members of the Sackler family who have served on the Purdue board alongside respected outside directors have acted ethically and legally,” they said. .
Massachusetts Attorney General Maura Healey, a Democrat, said in Tuesday’s hearing that she did not believe Congress had crafted bankruptcy law to allow “non-bankrupt billionaires who have made very , very bad things “to buy themselves immunity through the bankruptcy of their business.
Purdue said in a statement he was focusing on his proposed reorganization plan which is currently pending in U.S. bankruptcy court for the Southern District of New York and will be submitted for approval in August. The company also noted that the Sackler families will not be involved in the reorganized entity that emerges from bankruptcy.
the plan “Will provide the funds and resources that are needed now and would have a profoundly positive impact on public health,” Purdue said.
The plan incorporates a proposed settlement that the company says is worth more than $ 10 billion to resolve lawsuits filed by states, local governments and individuals that led to its bankruptcy. The Sacklers, who are estimated to be worth $ 11 billion, say they will contribute $ 4.275 billion in return for protection from opioid litigation.
Critics of the deal, which include about 24 US states, believe the Sacklers should pay more.
Republican members of the committee said throughout the hearing that they wanted the Sacklers to be held accountable, but that the most pressing crisis for the United States concerns drugs imported from Mexico to the United States.
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