The U.S. Department of Justice on Friday asked the U.S. Supreme Court to stop Purdue Pharma from proceeding with a bankruptcy settlement that protects its Sackler family owners from lawsuits.
An appeals court rejected a proposed delay earlier this week, ruling that Purdue may proceed with a bankruptcy plan that wasin May. Purdue's bankruptcy plan would shield its owners from opioid lawsuits in exchange for a $6 billion contribution to the company's broader bankruptcy settlement.
The U.S. Trustee argued that Purdue's settlement is an abuse of bankruptcy protections meant for debtors in "financial distress," not people like the Sacklers, who withdrew $11 billion from Purdue before agreeing to contribute $6 billion to its opioid settlement. Members of the Sackler family have denied wrongdoing but expressed regret that the painkiller OxyContin "unexpectedly became part of an opioid crisis." They said in May that the bankruptcy settlement would provide "substantial resources for people and communities in need."Purdue has sought to use bankruptcy to resolve thousands of lawsuits, many filed by state and local governments, alleging that OxyContin helped kickstart an opioid epidemic that caused more than 500,000 U.S.
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