Judge rejects Sackler immunity deal, vacating Purdue Pharma opioid settlement

Enlarge / Frank Huntley, who raises awareness of opiate addiction with his sculpture "Pill Man," is among protesters who rallied at the Department of Justice in Washington, DC, on December 3, 2021, calling on Attorney General Merrick Garland to bring criminal charges against members of the Sackler family. (credit: Getty Images | Pacific Press )

A federal judge yesterday rejected the Purdue Pharma settlement that would grant lifetime legal immunity to the Sackler family for their role in the opioid crisis, finding that the bankruptcy court doesn't have the authority to approve legal immunity for people who did not declare bankruptcy. The ruling to vacate the bankruptcy plan was issued by Judge Colleen McMahon in US District Court for the Southern District of New York.

Non-debtors like the Sackler family members aren't obligated to "disclose their assets and apply them... to the resolution of the claims of their creditors," McMahon noted. Because non-debtors do not have those obligations, they also "do not have any rights at all under the 'special remedial scheme' that is bankruptcy-certainly not the 'right' to have claims that are being asserted against them outside the bankruptcy process released."

The $4.5 billion settlement was previously approved by a judge in US Bankruptcy Court for the Southern District of New York. While 15 US states agreed to the settlement, eight states and the District of Columbia objected to it and filed appeals. US government officials also objected to the settlement.

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