Purdue Pharma Backs Creditor Move to Sue Sacklers Over Assets

The bankrupt estate of Purdue Pharma says it will support a move by the opioid maker’s creditors to sue members of the Sackler family over allegations that they improperly shifted billions of dollars of Purdue profits into offshore trusts.

The filing is among the first moves from parties in the case after the US Supreme Court last month scuttled a $6 billion bankruptcy settlement that Sackler family members had agreed to pay to resolve claims that the OxyContin manufacturer helped fuel America’s opioid crisis.

The Supreme Court’s ruling now forces the company and its owners into mediation to hammer out a new deal with creditors, opioid victims and state prosecutors.

Should a new round of mediation fail, the estate, which represents the Purdue businesses and not the Sackler family, said Monday it would back efforts by an official committee of creditors to recover more than $11.5 billion it says Sackler family members shifted offshore in the years preceding Purdue’s 2019 bankruptcy.

The Supreme Court nixed the settlement deal because it said it would have improperly shielded members of the Sackler family from any future lawsuits.

The creditors said in a filing Monday that they were seeking to ensure that the Sacklers are not allowed “off the hook” for their role in the opioid crisis as well as “for their secretion of billions of dollars from Purdue to Sackler spendthrift trusts and overseas affiliates.”

Representatives for families of the late Mortimer Sackler and Raymond Sackler said in a statement Monday that the filing was “riddled with factual errors.”

It “ignores that about half the money was paid in taxes and is contrary to the goal of working together towards a resolution that provides billions of dollars for communities and people in need.”

The company has asked US Bankruptcy Judge Sean H. Lane to appoint a pair of mediators to oversee talks involving the creditors committee, victim groups, the Sacklers and other parties. The goal is to come to a new deal that would comply with the US Supreme Court ruling.

The bankruptcy is Purdue Pharma LP, 19-23649, US Bankruptcy Court for the Southern District of New York.