💥A Bomb Just Dropped in Purdue Pharma💥

District Court Judge Vacates Bankruptcy Court Approval of Sackler Releases

Let’s get this out of the way: yes, clearly, Purdue Pharma is UNEQUIVOCALLY the biggest loser of the week. This is literally the easiest call we’ve ever had to make.

In a 142-page opinion, Judge McMahon of the United States District Court for the Southern District of New York dropped a bombshell of a decision and order on appeal vacating Judge Drain’s bankruptcy plan confirmation order — an order that, among other things, blessed non-consensual non-debtor-third-party liability releases of the Sackler f*ckfaces. We’ll spare you the lengthy read (though we do recommend it): the Judge concluded that the USDC had both legal and factual de novo review; that there was zero statutory predicate for Judge Drain to approve the releases (effectively neutering the catch-all power of Bankruptcy Code section 105 in the process); that, in the absence of statutory authority, there is no such thing as “residual authority”; and that the Sacklers are just generally sacks of sh*t. Ok, ok, Judge McMahon didn’t expressly say that last bit but it is implied: after all, as the Judge takes pains to note, it’s clear from the factual record that the Sacklers consulted with bankruptcy attorneys immediately after entering into a ‘07 plea deal and then, over a period of many years, siphoned off assets (~$10b) into impregnable legal structures in far flung places to shield themselves in the event of an eventual bankruptcy they knew was well within the realm of possibility. These people truly are something else.

These people will also most certainly appeal — something Judge McMahon….

TO READ THE REST OF THIS ARTICLE, YOU MUST BE A PAID SUBSCRIBER. YOU CAN DO SO HERE.