Bankruptcy judges and Congress must fill the Sackler gap

0

That can’t happen. Bankruptcy judges should heed formal objections from Massachusetts Attorney General Maura Healey and dozens of other state officials trying to prevent members of the Sackler family who are not involved in the company’s bankruptcy from shielding most of their assets in exchange for a payment of 4 Billions of dollars and the loss of corporate control.

Moving with an obscure legal device called “non-consensual third-party publication“Would essentially deprive state and local officials of the police power they should have to hold those responsible for the crisis accountable and not to adequately compensate all victims, so a brief filed last week by Healey and other officials. Find out BKHQ for more bankruptcy details.

In addition, Congress must act to close this virtual escape hatch so that wrongdoers can use corporate bankruptcy proceedings to evade individual liability.

A multitude of lawsuits accuse members of the Sackler family, who founded and controlled Purdue, and in particular Dr. Richard Sackler, for years aggressively promoting and marketing OxyContin to increase drug use and maximize profits while misleading doctors and patients about the drug’s addictiveness. They did this while trying to protect their own family name – which is well known in the world of philanthropy – from the taint of the scandal. Ever since their deeds came to light partly because of the efforts of the sister publication of the Globe STAT, Museums from the Louvre in Paris to the Smithsonian Institutions in Washington dropped the name Sackler. Tufts University has also deleted the name from its programs and buildings, including the medical school.

The company has also been targeted by federal and state officials accusing it of accelerating payments to members of the Sackler family after being fined for its role in the opioid crisis. Between 2007 and 2017, based on the company’s own court records, the family received nearly $ 11 billion, compared with just $ 1.3 billion in 1995 through 2007. Healey called this disclosure “the precise definition of ill-gotten gains.”

“Despite their own admitted guilt,” state officials claim in their brief filed Friday in a New York bankruptcy court, “the company and other debtors are trying to plug an unconfirmed plan that would, among other things, dissolve.” [the Sacklers] in return for the tedious payment of just a tiny fraction of their independent liability, illicit profits, and current assets against appeals from attorneys general in 24 states and the District of Columbia, who represent 53% of the US population. “

Bankruptcy judges have a wide discretion in approving settlement proposals, but in this case the interests of justice require the ability to hold family members accountable if they do misled those seeking relief from chronic pain and sent millions of them down a painful and dangerous path of addiction. Doing otherwise violates the principles of fairness and equity by which all judges are bound.

And Congress should ensure that attorneys general never again have to rely on individual judges to prevent this abuse of bankruptcy courts. Legislation introduced by Carolyn Maloney, Democrat of New York, and MP their co-sponsors Including representatives from Massachusetts, Katherine Clark, Ayanna Pressley, Stephen Lynch and Jim McGovern Stop Shielding Assets from Known Corporate Liability with the Elimination of Non-Debtor Releases (SACKLER) Act, would close the loophole some of the Sacklers are trying to exploit.

If the Sacklers deal is finalized – which could happen as early as this month if the states ‘objection is dismissed – it would set a dangerous precedent that will protect the evildoers’ wealth while their companies go bankrupt. This is a legacy that the courts and Congress must avoid.

Correction: An earlier version of this article incorrectly stated that Richard Sackler was the founder of Purdue Pharma and not a member of the family that founded and controlled the company. It was also misidentified who the civil servants found guilty; it was the company and its debtors, not the Sackler family.


Editorials represent the views of the Boston Globe Editorial Board. Follow us on Twitter at @GlobeOpinion.

Share.

Leave A Reply