Purdue Pharma bankruptcy refusal

We are fortunate today to have Professor Rich Hynes from AVU Law School to help us understand all of this.

In previous Mountain Money episodes, we’ve covered the practices of Purdue Pharma and its owners, the Sackler family. Launched in 1995, Purdue’s flagship product, Oxycontin, was aggressively promoted as providing safe and long-lasting pain relief with reduced risk of addiction due to its time-release properties.

In fact, Oxycontin was very addictive and Purdue knew it was crushed and sniffed and massively over-prescribed. The result has been widespread addiction and abuse.

And the boy did he sell it. Between 1995 and 2017, Oxycontin generated staggering $ 35 billion in revenue for Purdue. As of January 2019, some 36 states and other entities were suing Purdue for damage caused by the opioid epidemic.

Purdue elected to file for bankruptcy pursuant to an interim settlement reached with some of the states that sued it. Other states have focused on the fact that the Sackler family had withdrawn some $ 10.7 billion from the company since the company had undergone a legal review and opposed the plan to proposed bankruptcy that would have protected the family from future personal liability. Nonetheless, it was initially approved by the bankruptcy court, then quashed at the district court level.

So how would bankruptcy have worked? Would the outcome have been fair to the states and the many families affected by the opioid scourge? Who were the main players in the bankruptcy process and how did it go? More importantly, what was the third party release provision that would have protected the Sacklers from further personal liability and why did the district court reject it?

We are fortunate today to have Professor Rich Hynes from AVU Law School to help us understand all of this.

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