Warren, Blumenthal, Maloney, and DeSaulnier Urge DOJ to Immediately Appeal Purdue Pharma’s Bankruptcy Plan that Would Shield Sackler Family from Accountability for Opioid Crisis
Plan would release Sacklers from individual accountability, deny victims and state Attorneys General the opportunity to litigate their cases; Recently introduced Nondebtor Release Prohibition Act of 2021 would virtually eliminate the use of non-consensual third-party releases in bankruptcy claims and ensure bad actors are held accountable
Washington, D.C. - United States Senators Elizabeth Warren (D-Mass.) and Richard Blumenthal (D-Conn.), and United States Representatives Carolyn B. Maloney (D-N.Y.) and Mark DeSaulnier (D-Calif.) sent a letter urging the Department of Justice (DOJ) to file an immediate appeal of Purdue Pharma, L.P.’s bankruptcy plan of reorganization that would prevent the Sackler family from being held accountable for the opioid crisis. If the Bankruptcy Court confirms the plan at the confirmation hearing set for next week, the Sackler family would be released from individual accountability for the opioid crisis they helped create. Victims and several state Attorneys General who want to litigate their cases against the Sacklers would be unjustly denied the opportunity to pursue their claims.
Since Purdue Pharma filed for bankruptcy in 2019, the Sackler family has tried to use non-consensual third-party releases, to protect themselves and their assets from lawsuits linked to the opioid crisis. This loophole in bankruptcy law has increasingly been used by bad actors who have not filed for bankruptcy to escape personal accountability for their actions by shielding themselves through a bankruptcy proceeding of another corporation or entity. While the Nondebtor Release Prohibition Act of 2021 — recently introduced by Senators Warren and Blumenthal, and Representatives Nadler and Maloney — would virtually eliminate the use of non-consensual third-party releases, the members are seeking DOJ intervention in the impending confirmation of Purdue’s reorganization plan to ensure the due process rights of non-consenting creditors are preserved.
“From the outset of this case members of the Sackler family have piggybacked off of Purdue’s bankruptcy case to avoid personal accountability for their actions at Purdue,” said Senator Warren. “The Sacklers bear a significant responsibility for the opioid crisis and they should not be allowed to abuse the bankruptcy system to avoid accountability for their actions. DOJ has stated that these non-consensual third-party releases violate due process and the agency has a responsibility to quickly put an end to the Sacklers' irresponsible and unfair attempts to evade accountability for the suffering they’ve caused.”
“The Sackler family fortune was built on the graves of people killed by opioids. Now the Sacklers are trying to use the bankruptcy court’s restructuring process to protect their blood money and avoid personal accountability for their actions that harmed thousands of Americans and their families. The Department of Justice can stop the Sacklers’ abuse of the court system by filing an immediate appeal and preventing these bad actors from using bankruptcy proceedings as a free pass,” said Senator Blumenthal.
“The Sacklers are poised to once again evade accountability for fueling a crisis that has claimed more than half a million American lives,” said Representative Maloney, Chairwoman of the House Committee on Oversight and Reform. “It is imperative that the Department of Justice intervene to prevent the Sacklers from obtaining nonconsensual third-party releases through Purdue’s bankruptcy. The Department made clear that these legal releases are unconstitutional and not permitted under the Bankruptcy Code, and the Department must act swiftly to avert this miscarriage of justice.”
“The Sackler family must be fully held to account for their role in causing an epidemic that has claimed the lives of more than 800,000 mothers, daughters, fathers, and sons since 1999. They cannot be allowed to grotesquely manipulate the bankruptcy process to evade individual responsibility. We are calling on the DOJ to file an immediate appeal to ensure the Sacklers can be held liable for their actions,” said Congressman Mark DeSaulnier.
Last month the DOJ expressed “fundamental concerns” with Purdue’s plan of reorganization, specifically stating that the use of non-consensual third-party releases violate due process, are not permitted under the Bankruptcy Code, and that bankruptcy courts lack authority to approve the releases in the reorganization plan. Despite these arguments, the DOJ has failed to object to the reorganization plan — effectively approving the reorganization plan that it claims contains unconstitutional releases. Chairwoman Maloney and Representative DeSaulnier previously sent a letter urging the DOJ to oppose Purdue's plan of reorganization because its terms were in direct conflict with the DOJ’s prior position. However, there is still time for the DOJ to intervene in the case by seeking an immediate direct appeal to the Second Circuit Court of Appeals on the constitutionality of the Plan’s nonconsensual third-party releases
Senator Warren and her colleagues have been fighting to address the opioid crisis facing our country must be addressed comprehensively — including by holding the Sackler family accountable for their wrongdoing:
- On July 28, 2021, Senators Warren, Dick Durbin (D-Ill.), and Richard Blumenthal (D-Conn.), and Representatives Jerrold Nadler (D-N.Y.) and Carolyn B. Maloney (D-N.Y.) announced legislation to prohibit the use of non-consensual, non-debtor releases that have helped entities and individuals, like members of the Sackler family, escape accountability for wrongdoing through bankruptcy proceedings.
- On November 10, 2020, Senators Warren, Tammy Baldwin (D-Wis.), Sheldon Whitehouse (D-R.I.), and Maggie Hassan (D-N.H.) led colleagues to call on Trump's Justice Department to stop plans to make Purdue Pharma a public benefit corporation.
- On November 20, 2020, Senators Warren and Edward J. Markey (D-Mass.) sent a letter requesting information from the DOJ regarding its settlement agreement with Purdue Pharma and the Sackler family, including a proposal for Purdue's reorganization into a "public benefit company.”
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