Opioid manufacturer Purdue Pharma filed for bankruptcy this weekend after reaching a tentative settlement with state and local governments that are suing the company over the financial toll of the opioid crisis.
Settling for bankruptcy is not uncommon for companies that have been sued for mass torts, rather than continue to litigate in courts around the nation, says Jonathan Lipson, professor at Temple University’s Beasley School of Law.
That process also puts a hold on continuing litigation outside of a proposed settlement deal.
The states and counties suing the manufacturing giant are split over whether to accept the proposed settlement. Attorney General Josh Kaul announced last week that he intends to pursue a separate deal for Wisconsin.
Last Friday the New York Attorney General’s office disclosed that the Sackler family, which owns Purdue Pharma, had transferred about 1 billion dollars to overseas bank accounts.
Lipson says he predicts Purdue will ask the bankruptcy court to extend the hold on the settlement deal in order to protect the Sackler family from litigation that would hold them responsible.
But whether or not the Sacklers will be personally shielded from litigation is unclear.
In addition to specializing in bankruptcy and business failure at Temple University, Lipson’s also worked on a variety of large and complex chapter 11 cases as a corporate and commercial lawyer, and he’s a graduate of the University of Wisconsin-Madison’s Law School. He spoke with producer Chali Pittman on Monday to untangle the latest with this complex lawsuit.