Purdue Pharma looks to extend bankruptcy shield to Sacklers

Hours after seeking bankruptcy protection for the company Sunday night, Purdue Pharma's lawyers said they would ask a judge to issue an injunction that would halt legal hostilities from attorneys general who will not sign on to a settlement the drugmaker has offered.

Hours after seeking bankruptcy protection for the company Sunday night, Purdue Pharma's lawyers said they would ask a judge to issue an injunction that would halt legal hostilities from attorneys general who will not sign on to a settlement the drugmaker has offered. Purdue's lawyers say they will argue the company's owners, members of the wealthy Sackler family, are entitled to a shield from litigation. Government claims against the Sacklers, as well as Purdue's directors and officers, are "inextricably intertwined" to litigation with the company directly, according to the lawyers. Purdue has the backing of 24 states and thousands of local governments for a multibillion-dollar settlement of litigation over the nation’s opioid addiction crisis. But with other states demanding that the company and the Sacklers pay more than what they have offered, extending the bankruptcy shield to the family will likely create a dispute in bankruptcy court. Purdue has argued that allowing continued litigation in other courts would only sap money from the company's creditors and be fatal to a comprehensive deal. A bankruptcy filing automatically blocks ordinary lawsuits but leaves an opening for states to go beyond seeking money damages and enforce their police and regulatory powers. Purdue has proposed subjecting itself to an injunction against improper opioid marketing, a move designed to make it harder for the holdout states to fit through the police power loophole.