Court says OxyContin maker’s bankruptcy and protections for Sackler family members can move ahead

OxyContin maker Purdue Pharma can start executing a settlement that protects members of the Sackler family who own the company from civil lawsuits over the toll of opioids, a court ruled Tuesday.

The ruling from the 2nd U.S. Circuit Court of Appeals in New York allows the company’s transformation to start — though it’s still subject to approval from another court.

Under a deal reached last year with thousands of state and local government entities, the company is to become a new entity, with its profits being used to fight the opioid epidemic. And Sackler family members are to pay up to $6 billion over time.

The Purdue deal is one of the bigger ones in a series of corporate opioid settlements worth a total of more than $50 billion so far. Unlike most of them, it includes funds for people who were victims of the crisis and their families.

In exchange, the members of the wealthy Sackler family, who are not themselves seeking bankruptcy protections, are to be shielded from lawsuits.

A 2nd Circuit panel approved the deal in May. By then, the main remaining objector was the U.S. Bankruptcy Trustee, which says the Sacklers should not have legal protections.

The trustee has said in court filings that it intends to ask the U.S. Supreme Court to take the case. The deadline for that request is Aug. 28.

But the 2nd Circuit said Tuesday that it would not hold back the settlement from being enacted. The bankruptcy trustee could now ask the top court to put the settlement plan on hold.

The trustee, an arm of the federal Department of Justice, did not immediately respond to an email seeking comment Tuesday.

The trustee warned the 2nd Circuit in the filing that if it did not keep Purdue’s transformation on hold, it might be too late, saying in a filing that “the plan proponents will act swiftly to consummate the plan” in an effort to make the objections moot.

A Purdue spokesperson declined to comment. But in a court filing last week, the company asserted that “there is is no realistic prospect that the Plan can be substantially consummated until well after the Supreme Court decides” whether to take the case, noting that it would take at least several weeks to have a judge sign off on the final bankruptcy plan, and that the deal can’t be completed until after the company is sentenced for a criminal guilty plea — something that could not happen for months.

Opioids have been linked to more than 70,000 fatal overdoses annually in the U.S. in recent years. Most of those are from fentanyl and other synthetic drugs. But the crisis widened in the early 2000s as OxyContin and other powerful prescription painkillers became prevalent.