Members of the Sackler family who control OxyContin-maker Purdue Pharma LP allegedly used a web of corporate entities to transfer funds from the company to themselves, moves the New York attorney general says were fraudulent, on the basis that the company was already insolvent or close to it, the Wall Street Journal reported. An amended lawsuit filed yesterday by New York Attorney General Letitia James against Purdue and eight individual Sackler family members is pushing a novel argument that profits paid to Purdue’s owners should be clawed back because of mounting litigation filed against the company. The claims hinge on a legal theory meant to protect creditors from debtors that try to stash or shield assets for their personal benefit. The billionaire Sackler family allegedly transferred funds from Purdue and an affiliated generic drugmaker called Rhodes Pharmaceuticals LP into various entities that family members control through trusts, according to the amended lawsuit. Rhodes was formed in 2007, state business records show, five months after Purdue pleaded guilty to federal charges of misleading the public about the addiction risk related to OxyContin. The complaint alleges that a senior manager at Purdue called Rhodes a “landing pad” for Purdue “to prepare for the possibility that they would need to start afresh following the crisis then engulfing OxyContin.”
