Supreme Court blocks Purdue Pharma bankruptcy plan shielding owners from lawsuits

July 2024 ยท 1 minute read

Brian Mann:

What we're likely to see is pretty โ€” pretty big.

This is really โ€” in some ways, it could change the way justice works in America. Right now, a lot of people are using the โ€” again, the really awesome power of bankruptcy that can force people to make settlements, force people to give up lawsuits. And, again, usually that's reserved for bankrupt companies, insolvent individuals.

But, in recent years, some parts of the country, appeals courts have allowed bankruptcy judges to approve deals like this. And in some parts of the country, bankruptcy judges have said, no, this power isn't in the law.

And so what the Supreme Court is now likely to do is resolve this nationally, either open the door to bankruptcy courts being able to do deals like this, cut arrangements like this with people like the Sacklers, with companies like Johnson & Johnson and Purdue Pharma. They may say yes, and open the floodgates.

Or it's possible they will say, no, this is not what bankruptcy was meant to do. This bankruptcy was meant for insolvent companies, not for wealthy people trying to essentially pay their way out of a lot of lawsuits.

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