The Sacklers Allegedly Drained Billions From Purdue Pharma Before Filing For Bankruptcy...
Members of the Sackler family on Monday said billions of dollars they collected from Purdue Pharma before the company filed for Chapter 11 in the United States was the result of extra cash, not part of a “secret plan” to abuse the bankruptcy system.
In court papers, lawyers for the Sackler family members, who controlled Purdue Pharma, rejected US District Judge Colleen McMahon’s suggestion that the more than $10bn the company paid out in the years leading up to the 2019 bankruptcy could amount to an abuse of the Chapter 11 process. Around half of the money went to taxes or business investments, according to court documents.
The Sacklers are alleged to have drained Purdue Pharma of cash over several years. When it eventually filed for bankruptcy in the face of lawsuits over the opioid epidemic, the company needed the Sacklers’ money to settle the billions of dollars of legal claims. In return, the Sacklers were able to demand protection from the lawsuits.
The Sacklers rejected the notion that there was any “scheme” to “deliberately weaken Purdue so it could not reorganize without” their financial contribution.
There is no evidence to suggest the payments “were made as part of a secret plan” to abuse the bankruptcy system, the Sackler lawyers said. They called the idea “pure fiction”.
The payments, the Sacklers argued, were made as business grew, including increased revenue following the restoration of Purdue Pharma’s patent for OxyContin in 2008.
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