A federal judge overturned the bankruptcy plan negotiated by Purdue Pharma on Thursday, saying a deal that released the billionaire Sackler family from legal claims related to its opioids was “inconsistent” with the law.

In her Thursday ruling, District Judge Colleen M. McMahon stated that the $4.5 billion settlement announced earlier this year should not move forward as it shields the Sacklers — one of the wealthiest families in America — from any liability in future cases related to Purdue’s main opioid, OxyContin.

Purdue Pharma stated Thursday night that it would appeal against the decision. It criticizes the decision and says it will limit the funds available to courts who sue the company because of its participation in the epidemic.

“It will delay, and perhaps end, the ability of creditors, communities, and individuals to receive billions in value to abate the opioid crisis,” Steve Miller, the chairman of the company’s board of directors, said in a statement. “These funds are needed now more than ever as overdose rates hit record-highs, and we are confident that we can successfully appeal this decision and deliver desperately needed funds to the communities and individuals suffering in the midst of this crisis.”

Purdue sought bankruptcy protection for the first time in 2019. This was amid a tsunami of lawsuits that Purdue faced over its marketing strategies to sell OxyContin to Americans. A landmark New York bankruptcy judge approved the settlement earlier in 2019. It was celebrated by thousands of tribal, state and local governments that they will immediately apply the money for opioid addiction treatment.

Purdue would be formally disbanded and a company to make OxyContin would be formed. However, the proceeds would go to funding opioid treatment in states. According to the Sacklers, they will give up their ownership in the company and pay $4.5 billion personal contribution towards the settlement. Purdue lawsuits would also be dismantled.

The Sacklers insist that any civil cases relating to opioids brought in civil courts by the company to which they contributed some billions be exempted from the agreement.

A number of states appealed, stating that they disagree with the terms and adding that the Sacklers must be held accountable for the products. Lawyers representing those states said the judge’s decision Thursday will help hold the family accountable for its role in the epidemic.

“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,” William Tong, Connecticut’s attorney general, said in a statement.

McMahon stated in her Thursday ruling that she was disturbed that Purdue had been withdrawn over $10 billion by the Sacklers between 2008-2018. These funds were principally deposited into accounts that are out of reach for American authorities during the peak of the opioid epidemic.

Sacklers deny any improper conduct in connection with the transfers.

Source: HuffPost.com.

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