TEVA - Supreme Court to hear arguments on Purdue Pharma $6B bankruptcy settlement

2023-08-10 16:38:11 ET

The US Supreme Court in December will hear arguments in a case that will examine the legality of a $6B bankruptcy settlement that shields Purdue Pharma's Sackler family from further exposure over its role in the nation's opioid crisis.

In an order , the High Court also stayed any further bankruptcy proceedings against Purdue.

In a March 2022 court filing with the U.S. Bankruptcy Court for the Southern District of New York, the Sackler family said they would pay at least $5.5B and as much as $6B . However, that settlement is contingent on the Sacklers receiving protection from any further civil suits.

Purdue is no longer controlled by the Sacklers as the company declared bankruptcy in 2019. The Biden administration, which brought the suit to the Supreme Court, has accused the family of taking billions of dollars from Purdue prior to agreeing to the $6B settlement.

The core issue is whether the Sacklers can be subject to legal protections under bankruptcy even though the family itself has not filed for bankruptcy.

While the U.S. Second Circuit for the Court of Appeals in May upheld the proposed settlement, the administration has held that the Sacklers are taking advantage of bankruptcy protections.

Johnson & Johnson ( NYSE: JNJ ), Teva Pharmaceutical Industries ( NYSE: TEVA ), and drug distributors AmerisourceBergen ( ABC ), Cardinal Health ( NYSE: CAH ), and McKesson ( NYSE: MCK ) have all reached agreements with states over alleged roles in the opioid crisis .

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