CT’s attorney general on Purdue Pharma bankruptcy order: ‘Supreme Court got it right’

HARTFORD, CT (WFSB) - Connecticut’s attorney general said the U.S. Supreme Court made the right decision when it killed a settlement with OxyContin maker Purdue Pharma.

In a 5-4 vote, the court overturned a bankruptcy order on Thursday morning.

Attorney General William Tong released his statement a short time later.

“This decision is a definitive rebuke of the Sackler family’s abuse of the bankruptcy code,” Tong said. “The U.S. Supreme Court got it right—billionaire wrongdoers should not be allowed to shield blood money in bankruptcy court. In practical terms, this sends us back to bankruptcy court, where I expect we will re-enter mediation. Connecticut led the way in extracting the initial $6 billion settlement from Purdue and the Sacklers, and we will be front and center again in any new negotiations. From day one, this fight has been about justice and accountability for the hundreds of thousands of victims of Purdue’s misconduct and the Sackler family’s greed. We will continue to insist that any settlement funds be used to save lives through opioid treatment and prevention, including direct relief to victims and their families.”

Tong said Connecticut first filed a suit against Purdue and individual members of the Sackler family in 2019. It claimed that the company and family peddled a series of falsehoods to push patients toward its opioids, through which it reaped massive profits while opioid addiction skyrocketed. The state expanded and amended that suit later in 2019 to add additional defendants and allegations, including the fraudulent transfer of hundreds of millions of dollars from Purdue Pharma to the Sacklers to shield their wealth from accountability.

Purdue Pharma filed for bankruptcy in Sept. 2019.

In 2021, the bankruptcy court approved an inadequate Purdue bankruptcy plan that granted a lifetime legal shield to the Sackler family, unlawfully blocking states like Connecticut from pursuing claims against the family. The plan required the Sackler family to pay $4.3 billion over nine years to the states, municipalities and plaintiffs that sued the company. Tong said California, Connecticut, Delaware, Maryland, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia objected to and ultimately appealed the plan. The United States Trustee, an arm of the Department of Justice, also appealed.

In Dec. 2021, the U.S. District Court vacated the Purdue bankruptcy order. It agreed with the non-consenting states that the bankruptcy court lacked authority to force states to release their claims against the Sackler family.

Tong said the district court decision paved the way for Connecticut and the eight other dissenting states to negotiate a new settlement that forces Purdue and the Sacklers to pay $6 billion to victims, survivors and states, to permanently exit the global opioid business, and to force the Sacklers to reckon face-to-face with victims and survivors at a public hearing.

“Today the Supreme Court says that the Sacklers can’t abuse bankruptcy law to shield themselves and their blood money and that’s the right result,” Tong said.

But not everyone had a positive reaction to the news.

“It was just kind of another one of those: your shoulder slumps and you let out a long sigh and you say like here we go again,” said Margaux Farrell, Chief of Staff of the Root Center.

The Root Center is a mental health and addiction nonprofit which serves 6,000 patients across Connecticut every day.

Farrell said while she agrees the Sacklers should be held accountable, she worries the longer the money is held up in court the more lives it costs.

“You can’t put a dollar figure on the need. It’s out of control what’s going on with the opioid epidemic, with the mental health epidemic. It’s all of it combined,” Farrell said.

“What would you say to Connecticut families who may feel disheartened by this decision because it means that money may not come maybe as soon as they were expecting?” Eyewitness News asked.

“This is entirely the fault of the Sacklers and Purdue Pharma, and if they are frustrated and angry, I agree with them. I’m frustrated and angry too that Purdue Pharma and the Sacklers ran into bankruptcy court. They abused the bankruptcy process and bankruptcy law to draw this out,” said Tong.

Tong wants families to know there is already money available for treatment and education.

Connecticut has already received around $100 million from other lawsuits related to the opioid epidemic.

As part of that settlement, Connecticut did not participate in the appeal before the Second Circuit and the U.S. Supreme Court.

Tong said he testified in 2021 before the House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law in support of reforms to bankruptcy laws that would prohibit non-bankrupt individuals and businesses from exploiting loopholes in the bankruptcy code to evade accountability.