Months after Purdue Pharma’s bankruptcy plan was foiled by the Supreme Court, its previous owners are bracing for a legal battle with creditors.
The Sacklers responded on Monday to claims they fraudulently transferred billions of dollars “into an elaborate system of trusts and offshore entities” in an effort to shield the assets from opioid lawsuits. Lawyers for the family called the allegations “utterly meritless” in a court filing, adding that they intend to “object to and litigate” the matter.
The claims come from a committee of creditors who argued that Purdue knew early on the opioid litigation threatened its solvency. The committee filed an amended motion in September asking the bankruptcy court for standing to prosecute the claims.
Purdue, the maker of OxyContin, filed for bankruptcy in 2019 as it dealt with thousands of lawsuits related to its addictive opioid painkiller. The Sackler family ultimately agreed to settle with opioid victims, states and others for $6 billion, in exchange for immunity from any future lawsuits. But the Supreme Court rejected that plan in June, with the majority finding that “nothing in present law authorizes the Sackler discharge.”
“With that decision, the complex, interlocking terms of the parties’ deal may unravel, potentially consigning the estates to protracted litigation against the Sacklers,” the committee of creditors said in its motion for standing.
Lawyers for the Sacklers called the committee’s arguments “groundless rhetoric” on Monday, noting that “nothing happened” in cases filed before 2017 “that indicated that they threatened Purdue’s solvency.” They maintained that the transfers were “from a profitable company that left the company with all of the resources it needed to continue thriving — until a tsunami of cases overwhelmed it.”
The defendants also criticized plaintiffs’ public nuisance claims, noting that similar claims have been rejected in various states.
“The UCC proceeds as though it is a given that Purdue is liable on the Opioid Claims. But those claims have never been, and cannot be, established,” attorneys for the Sacklers wrote.
Lawyers for the creditors’ committee were not immediately available for comment.
“Justice for the victims of the Defendants already has been too long delayed,” the creditors’ committee wrote in a motion. “The most recent round of lawsuits relating to Purdue’s opioid sales and marketing misconduct began to be filed more than a decade ago, and concern misconduct by the Defendants that, in many cases, dates back even farther.”
If the plaintiffs’ motion is granted, defendants asked that litigation be deferred until the court has determined “whether the Opioid Claims — or any significant number of them — should be allowed,” and “if so, in what amount.”