In an earlier post, I linked to an episode of Last Week Tonight where John Oliver explained how the odious Sackler family are trying to use the bankruptcy laws so that, while they claim that they will be paying $4.5 billion, they will end up with total immunity frrom future lawsuits, will not have to admit guilt, and likely end up even more wealthy than they are now. This article explains why this is such a bad deal for the public and how it lets the Sacklers off the hook.
Members of the family that owns OxyContin maker Purdue Pharma will not contribute billions of dollars to a legal settlement unless they get off the hook for all current and future lawsuits over the company’s activities, David Sackler told a court on Tuesday in a rare public appearance.
The US bankruptcy trustee, nine states and the District of Columbia are objecting to the company’s settlement plan largely because it would grant legal protection to members of the Sackler family even though none are declaring bankruptcy themselves.
Suits against the company and the Sacklers, including from several states, have been paused since Purdue filed for bankruptcy nearly two years ago. If the reorganization is approved as it is, it would freeze those suits forever. Sackler family members are also seeking protections from future lawsuits over opioids and any actions involving Purdue, even those that had nothing to do with OxyContin.
The Purdue reorganization plan does have costs for Sackler family members. They would be required to give up ownership of the company, with future profits going to abate the opioid crisis. They would also have to contribute $4.5bn in cash and a charitable fund over time. That money is also slated to go to efforts to battle the crisis, with some going to victims and their families.
But a report commissioned by a group of state attorneys general said that because most of the payments come years from now, the Sacklers could use investment returns and interest to build even greater wealth while they make the payments. The family’s collective wealth is estimated at nearly $11bn, with much of that built on sales from OxyContin.
In the hearing on Tuesday, David Sackler, who was on the Purdue board from 2012 to 2018, was asked whether the family would emerge with more money in a decade when its share would be paid off, than it has now.
“I don’t think anyone can say that with certainty,” he said.
So the answer is yes. They almost certainly will end up with even more money.
I personally would like to see the Sacklers hounded for the rest of their lives by the threats of lawsuits by victims and their families.