The family that owns OxyContin maker Purdue Pharma will not contribute to a legal settlement if they are not given protection against all current and future lawsuits over the company’s activities, a court heard on Tuesday.
David Sackler, the grandson of one of the brothers who nearly 70 years ago bought the company that later became Purdue, testified at a hearing in federal bankruptcy court in White Plains, New York, that unless the settlement is approved with those protections included, as they currently are, “I believe we would litigate the claims to their final outcomes”, the Associated Press reported.
“We need a release that’s sufficient to get our goals accomplished. If the release fails to do that, we will not support it,” Sackler said.
The company’s settlement plan is facing objections from the US Bankruptcy Trustee, nine states, and the District of Columbia largely because it would grant legal protection to members of the wealthy Sackler family even though none of them are declaring bankruptcy themselves.
The concept has sparked protests, as well as federal legislation known as the SACKLER Act that would bar these deals, known as third-party releases. They are granted by bankruptcy courts in some parts of the US, but not all. The bill is stuck in Congress.
Suits against the company and the Sacklers, including from several states, have been paused since Purdue filed for bankruptcy nearly two years ago. If the reorganization is approved as it is, it would freeze those forever. Sackler family members are also seeking protection from future lawsuits over opioids and any actions involving Purdue, even those that had nothing to do with the drugs.
The deal would not protect Sackler family members from any criminal charges but no such charges have been announced against family members, according to the Associated Press.
It is not that the Purdue reorganization plan does not have costs for Sackler family members. The family would be required to give up ownership of the company, with future profits going to abate the opioid crisis. They would also have to contribute a total of $4.5 billion in cash and a charitable fund to battle the crisis over time. A share of the money will go to victims and their families.
But a report commissioned by a group of state attorneys general said that because most of the payments come years from now, family members could use investment returns and interest to build even greater wealth while they make the payments. The assumptions in that report came under attack from a Sackler lawyer in Tuesday’s testimony.
The family’s collective wealth is estimated at nearly $11 billion, with much of that built on sales from OxyContin.
Family members have long taken a low profile in the business world but a public role in philanthropy. Amid protests over its role in the opioid business, it has seen its name removed in recent years from wings and galleries at institutions including the Louvre in Paris. New York’s Metropolitan Museum of Art is reviewing the matter.