Temple professor says Purdue bankruptcy case needs watchdog

Jonathan Lipson, a bankruptcy expert, said the opioid maker’s case should have more oversight.

A Temple law professor is calling for a closer look into OxyContin maker Purdue Pharma’s bankruptcy proceedings.

Jonathan Lipson, the Harold E. Kohn Chair at the Beasley School of Law, alongside Georgetown professor Adam Levitin and Seton Hall professor Stephen Lubben, wrote a letter calling on the federal government to appoint an examiner who will look into whether the Sackler family, whose company has faced allegations of fueling the opioid crisis, is using the bankruptcy process to protect themselves.

“The unique public interest in this case is strong and unlikely to be addressed without the aid of an independent examination,” the professors wrote.

The U.S. Trustee Program has received the letter and will respond accordingly, wrote a spokesperson for the Department of Justice in an email to The Temple News.

Purdue filed for bankruptcy on Sept. 15 as part of a settlement with 24 states and more than 2,000 municipalities who sued the company, the Washington Post reported.

The purpose of a review by an outside examiner would be to understand the role that the Sacklers played in developing and marketing Oxycontin,  a highly addictive painkiller, and whether the family moved assets out of Purdue before the company filed for bankruptcy, Lipson told The Temple News.

The Sacklers have agreed to give up control of Purdue and contribute at least $3 billion toward settling the hundreds of lawsuits against them, The Post reported, though several state attorney generals have said that is not enough for a family that has been valued at $13 billion.

The professors fail to consider the “significant” costs associated with appointing an independent examiner, wrote Purdue Pharma in an email to The Temple News.

“Appointment of an examiner would divert critical resources towards more professional fees and away from where they should go: maximizing the value of an efficient settlement for the American people and providing critical resources to families and communities affected by the opioid crisis in a timely manner,” the company wrote. 

“There’s no doubt that, you know, examiners are not free,” Lubben told The Temple News. 

“Admittedly, to the extent that they have harmed people, that money should go to those people are harmed,” Lubben added. “But part of the appointment of an examiner would be to figure out exactly what it was that happened and who’s entitled to what.”

Lipson believes many victims of the opioid crisis want their day in court.

“They want to understand what happened, and they’re not going to get their day in court with bankruptcy,” Lipson said. “Bankruptcy exists to take that away from them.”

“But a second-best thing for them might be some explanation of what happened, so that they can move on, have some closure,” he added.

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