Purdue Pharma Bankruptcy Plan Vacated by District Court in Victory for Appellants Represented by Kleinberg Kaplan
Firm News | December 17, 2021 | Creditors’ Rights and Bankruptcy Litigation
Kleinberg Kaplan Creditors’ Rights and Bankruptcy Litigation partner Matthew J. Gold and associate Robert Tuchman have been representing the states of Washington, Connecticut, Delaware, Rhode Island and Vermont in their highly publicized legal battle against Purdue Pharma, maker of OxyContin, a painkiller that allegedly contributed to the national opioid crisis. Most recently, Gold and Tuchman advised the states on the appeal of the September 17, 2021 order of Bankruptcy Judge Robert Drain confirming the plan of reorganization of Purdue Pharma LP and affiliates. The appeal challenged the provision of the plan that bars the states (and other creditors) from prosecuting lawsuits against the Sackler family, which owns and used to manage Purdue.
On Thursday, December 16, in a victory for the appellants, U.S. District Court Judge Colleen McMahon ruled to vacate Purdue Pharma’s $4.5 billion bankruptcy settlement. The judge found that the bankruptcy court did not have the legal right to release claims against the company’s owners in the Sackler family, according to Law360.
As noted in The New York Law Journal, “McMahon found that Drain lacked the statutory authority to impose the non-consensual non-debtor releases, though she noted that her opinion ‘will not be the last word on the subject, nor should it be,’ because courts have struggled with the issue for years.”
The decision is also covered in The New York Times, The Wall Street Journal, The Financial Times, and others.
Kleinberg Kaplan’s Creditors’ Rights and Bankruptcy Litigation practice offers clients an aggressive approach to bankruptcy and insolvency issues. The firm has provided representation to individual and institutional debtors, creditors and investors of every type in bankruptcy litigation, adversary proceedings and contested matters in chapter 11, chapter 7 and chapter 15 cases, such as avoidance actions, adequate protection disputes, confirmation battles and claim disputes.