After the Supreme Court heard two hours of arguments Monday in a bankruptcy settlement for Purdue Pharma, “justices seemed divided,” the New York Times reported. The fiercely contested bankruptcy settlement with Purdue, which makes the prescription painkiller OxyContin, would funnel billions of dollars into addressing the opioid epidemic in exchange for shielding members of the wealthy Sackler family from related civil lawsuits. But the U.S. Trustee Program, an office in the Justice Department, had challenged the deal, asserting that the agreement violated federal law by guaranteeing such wide-ranging legal immunity for the Sacklers, who once controlled the company.
Questions from the justices reflected why the deal has drawn intense criticism in a dispute that pits money against principle. “The opioid victims and their families overwhelmingly approved this plan because they think it will ensure prompt payment,” Justice Brett M. Kavanaugh said, asking why the government was pushing to end a tactic approved over “30 years of bankruptcy court practice.” A lawyer for victims’ groups, Pratik A. Shah, insisted that the releases of liability were critical to the deal because members of the Sackler family would not sign on to an agreement, which risked leaving victims with nothing. Justice Elena Kagan asked whether such deals subverted the bankruptcy process: Did the settlement allow wealthy people like the Sacklers to shield themselves from lawsuits, including claims of fraud, without putting “anything near their entire pot of assets on the table?”
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