The settlement will probably survive an appeal, bringing an unsatisfying legal resolution to a long chapter of a painful public-health crisis. For many, the pain continues
Bankruptcy comes with costs and benefits. The debtor must disclose all assets, which are distributed to creditors. But in return the debtor—in this case Purdue—is freed of legal liability. As a condition of their participation in the deal, the Sacklers sought and won immunity from civil lawsuits related to the opioid epidemic, without declaring bankruptcy themselves. The arrangement is known as a non-debtor release from liability .
Last year five members of the family paid $225m to settle civil charges brought by the federal government that they sold OxyContin while knowing it to be “unsafe, ineffective and medically unnecessary”. Lots of states and individuals would probably file similar suits if they could. But non-debtor release means that will no longer be possible, since the terms apply to all parties with a claim against the Sacklers, even if they did not participate in the deal or assent to it.
The use of a non-debtor release has also been mooted in the reorganisation of two groups that filed for bankruptcy amid child-abuse lawsuits, the Boy Scouts of America andGymnastics. For defendants in sprawling litigation, moving to a bankruptcy court and securing a non-debtor release is appealing: it binds absent parties, foreclosing future claims from victims who have not yet come forward. Some Democrats want to ban the arrangement, which they say has been expanded beyond its original intent.
In the case of Purdue, the settlement does at least mean that money will be disbursed. But those who had hoped the family would have to pay more will be disappointed. “The Sacklers negotiated how much money they would turn over, and it’s as little as they thought they could get away with,” says Lindsey Simon of the University of Georgia. The settlement will probably survive an appeal, bringing an unsatisfying legal resolution to a long chapter of a painful public-health crisis.
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