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The Sacklers should pay dearly, but will they?

In tossing out OxyContin maker Purdue Pharma's bankruptcy settlement, U.S. District Judge Colleen McMahon opened the possibility that the Sackler family could be held financially liable for its drug-pushing schemes. Unfortunately, it could also lead to another outcome. Purdue Pharma could be dissolved via bankruptcy, leaving many plaintiffs largely uncompensated, while the Sacklers remain out of reach.

Connecticut and Attorney General William Tong were among the many plaintiffs who objected to the settlement that was backed by a majority of the plaintiffs in the highly complex class-action lawsuit. The evidence is overwhelming that to boost billions of dollars in sales, Purdue Pharma pursued a strategy of lying about the addictive nature of its product Oxycontin, marketed it to doctors as safe for their patients, and funded studies and organizations to promote the disinformation campaign.

When addicted patients could no longer get prescriptions, they turned to black-market sources to obtain it or to cheaper and more easily obtainable heroin and, often unknowingly, deadly fentanyl.

Purdue Pharma sought bankruptcy protection in 2019 as it faced thousands of lawsuits seeking compensation for the suffering its schemes had caused, but only after the Sacklers pulled billions of dollars out of the company, based in Stamford.

In September, Judge Robert Drain, a bankruptcy court judge in White Plains, N.Y., approved a settlement to dissolve Purdue Pharma and rebrand it as a new company called Knoa Pharma. The new company's profits would go to states and communities to fund opioid treatment and prevention efforts. The Sacklers agreed to renounce ownership and contribute $4.5 billion toward the treatment and prevention program, bringing total compensation to an estimated $10 billion.

What made the settlement agreement so contentious, and led numerous states, including Connecticut, to oppose it, was a provision that protected the Sacklers from all current and future Purdue-related opioid claims, although no family members had personally filed for bankruptcy.

Tong celebrated Judge McMahon's decision to reject the settlement on appeal.

"This is a seismic victory for justice and accountability that will re-open the deeply flawed Purdue bankruptcy and force the Sackler family to confront the pain and devastation they have caused," Tong stated.

Well, maybe.

As detestable as it was to see the Sacklers receive protection, the benefit of the settlement was that it would have made resources available to help the crisis now. It also avoided the uncertainty and delay that will come with continued litigation. McMahon's decision is now being appealed in an effort to reinstate the original agreement.

More than 100,000 Americans died from drug overdoses between May 2020 and April 2021 — a new record, according to the Centers for Disease Control and Prevention. An estimated 93,000 of those deaths resulted from opioid overdoses. The deaths are three times that of traffic accident deaths and twice that of gun fatalities.

Connecticut recorded nearly 1,400 overdose deaths in 2020, also a record.

McMahon's decision in blocking the deal was not about right or wrong, fair or unfair, but about the law. The bankruptcy code, she found, does not explicitly give a judge the authority to provide such protection to the Sacklers. It is a legal question appellate courts need to resolve. Better yet, Congress should pass a law barring business owners from receiving such protection unless they are parties to the bankruptcy.

If fairness prevails over legal maneuverings, the Sacklers will be stripped of their fortunes. Documents presented to the courts show Sackler family members, watching the company under increasing legal attack, transferred $10.4 billion from Purdue Pharma over the decade before the bankruptcy, most of it shifted to offshore accounts and trusts inaccessible to American authorities. A congressional review estimated the family wealth at $11 billion.

We wish Attorney General Tong, and the others who are confident they can obtain a fairer outcome in the bankruptcy proceeding, the best of success. But, make no mistake, this is a gamble with no assurances it will pay off for those in need of the resources the settlement would have provided.

The Day editorial board meets regularly with political, business and community leaders and convenes weekly to formulate editorial viewpoints. It is composed of President and Publisher Tim Dwyer, Managing Editor Izaskun E. Larrañeta, staff writer Erica Moser and retired deputy managing editor Lisa McGinley. However, only the publisher and editorial page editor are responsible for developing the editorial opinions. The board operates independently from the Day newsroom.

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