Bite-Sized Business Law Purdue Pharma II: The Sacklers Strike Out at SCOTUS
When the Supreme Court issued its highly anticipated opinion in the Purdue Pharma case this June, decades of bankruptcy practice was called into question. The Court’s opinion removed a potent shield from the Sackler family, owners of Purdue Pharma, who many believe caused the opioid crisis, and it also clarified the fundamental limits of bankruptcy law. Today, we take another look at this groundbreaking case and all its implications as we are joined again by Brook Gotberg and Richard Squire. After a quick recap of the history of the Sacklers and OxyContin, we take a closer look at third-party releases, why they came to be, and how the Sackers are considered third parties even while deeply entrenched in the company. Then we explore voting statistics and the role of consent in bankruptcy settlements, the aftereffects of the Bankruptcy Court confirming Purdue’s plan, the Supreme Court’s decision on the merits including how Section 1123(b)(6) and other bankruptcy laws were interpreted, and the arguments set forth in Justice Brett Kavanaugh’s dissent. We end with backdoor tort reform and try to understand the Supreme Court’s underlying agenda, and our guests detail possible legislative solutions as they share their visions of the future of bankruptcy law post Purdue Pharma.
Key Points From This Episode:
- A brief history of the Sackler family, OxyContin and the opioid crisis in America, and Purdue Pharma’s bankruptcy filing.
- Understanding a third-party release; what it is and how it came about.
- How the Sacklers, founders and owners of Purdue Pharma, can still be considered third parties.
- Voting statistics and the role of consent in the Purdue Pharma case.
- Why some bankruptcy plans are given the green light even after multiple creditor objections.
- The state of affairs after the Bankruptcy Court confirmed Purdue Pharma’s plan.
- Defining the central holding of the Supreme Court case handed down in June 2024.
- Unpacking Justice Kavanaugh’s dissent and the merits thereof.
- Exploring how Section 1123(b)(6) and other bankruptcy laws were interpreted in this case.
- The future of bankruptcy law after Purdue Pharma.
- Backdoor tort reform implications and the Supreme Court’s underlying agenda.
- Whether bankruptcy is trying to colonize other areas of law.
- Possible legislative adjustments and solutions.
Links Mentioned in Today’s Episode:
‘Harrington v. Purdue Pharma L.P.’
Associate Justice Brett M. Kavanaugh
‘Chapter 11 - Bankruptcy Basics’
Fordham University School of Law Corporate Law Center