OxyContin maker Purdue Pharma may proceed with a bankruptcy settlement that protects its Sackler family owners from lawsuits, despite a potential U.S. Supreme Court appeal in the case, a U.S. court ruled yesterday. The U.S. Court of Appeals for the Second Circuit approved Purdue's bankruptcy plan in May, ruling that the company can shield its owners from opioid lawsuits in exchange for a $6 billion contribution to the company's broader bankruptcy settlement. The New York-based court ruled that U.S. bankruptcy law allows legal protections for non-bankrupt parties, like the Sacklers, in extraordinary circumstances. Following the ruling, the U.S. Department of Justice's (DOJ) bankruptcy watchdog asked the court to pause its approval of the bankruptcy plan to allow time for a potential appeal to the U.S. Supreme Court. The DOJ argued that Purdue should not be allowed to move forward with its restructuring before the Supreme Court had a chance to weigh in on legal protections for non-bankrupt entities, an issue that has divided bankruptcy courts across the U.S. The DOJ said it intended to file a Supreme Court petition by Aug. 28. Purdue had argued that a delay was unwarranted and that there was only a slim chance that the Supreme Court would agree to hear the appeal.
