A federal appeals court on Friday weighed a multibillion-dollar settlement offer by the Sackler family members who own Purdue Pharma LP, questioning whether Congress has authorized a key feature of the drugmaker’s bankruptcy plan that would end civil opioid litigation against them, WSJ Pro Bankruptcy reported. A three-judge panel for the Second U.S. Circuit Court of Appeals questioned lawyers who crafted the proposed settlement, which offers the Sacklers broad legal protections through Purdue’s chapter 11 plan even though they haven’t filed personal bankruptcy. The deal is broadly supported by state attorneys general, opioid victims and other Purdue creditors but is being challenged by the Justice Department’s bankruptcy watchdog. The appeals court could cement the bankruptcy plan or scuttle it. In December, a federal judge in Manhattan threw out the proposed deal that would have extinguished civil suits against the Sacklers in exchange for roughly $4.5 billion from the family, which was opposed at the time by a handful of state attorneys general. While the appeal was pending, the Sacklers won unanimous support from state authorities for a revised settlement worth up to $6 billion.
