Purdue's appeal to revive the legal shield, which will protect its owner from lawsuits related to the prescription opioid OxyContin, has been denied by the judges of the U.S. appeals court.
A panel of three judges on the U.S. Court of Appeals was appointed to investigate the limits of a bankruptcy judge in protecting non-bankrupt parties like the Sackler family, owners of Purdue.
One of the judges said that the court's earlier rulings were baseless, and another judge argued that the bankruptcy protection for the company is necessary to secure funds for the opioid claims.
The bankruptcy plan will provide $6 billion from Sacklers to settle thousands of lawsuits faced by Purdue, claiming that the company fueled the nationwide opioid crisis. The attorney representing the company explained that if the Sacklers do not involve in the settlement, it will be difficult to get money for the opioid victims or state public health programs.
Even the U.S. Trustee's office that oversees the bankruptcy cases has argued against reviving the legal shield.
According to U.S. data, the country reported around 500,000 overdose deaths in the past two decades. Purdue is blamed for this large number of deaths, as it excessively marketed the addictive painkiller OxyContin resulting in an opioid epidemic.
The Sackler family argues that even though they regret their role over OxyContin in the crisis, their actions were legal and appropriate.
In December, a federal judge rejected Purdue's bankruptcy settlement over opioid claims by ruling that the company cannot drop lawsuits filed against its non-bankrupt owners. The ruling resulted in the company revising the opioid deal by adding another $1 billion to the settlement.
