Supreme Court to Scrutinize Purdue Pharma Bankruptcy Settlement

The U.S. Supreme Court on Thursday agreed to hear a challenge by President Joe Biden's administration to the legality of OxyContin maker Purdue Pharma's bankruptcy settlement that would shield its wealthy Sackler family owners from lawsuits over their role in the country's opioid epidemic.

The court also paused bankruptcy proceedings concerning Purdue and its affiliates and said in a brief order that it would hold oral arguments in December in the administration's appeal of a lower court's ruling upholding the settlement. The court's new term begins in October.

Purdue's owners under the settlement would receive immunity in exchange for paying up to $6 billion to settle thousands of lawsuits filed by states, hospitals, people who had become addicted and others who have sued the Stamford, Connecticut-based company over its misleading marketing of OxyContin.

At issue is whether U.S. bankruptcy law allows Purdue's restructuring to include legal protections for the Sackler family, who have not filed for personal bankruptcy.

Purdue filed for Chapter 11 bankruptcy in 2019 to address its debts, nearly all of which stemmed from thousands of lawsuits alleging that OxyContin helped kickstart an opioid epidemic that has caused more than 500,000 U.S. overdose deaths over two decades.