In Mass., frustration mounts as Purdue's bankruptcy drags on

The Supreme Court hit the brakes on the Purdue Pharma bankruptcy settlement on Thursday, leaving billions of dollars in legal purgatory as the Department of Justice and company attorneys haggle over the filing's complicated details.

That delay on the national stage has frustrated some in Massachusetts who have waited for years for the bankruptcy proceedings to conclude — and for the billions in funding to fight the opioid epidemic to finally make it to the impacted states, tribal governments and Washington D.C. Earlier, it was estimated that Massachusetts would receive $110 million of that money.

Cheryl Juaire of Marlboro lost two children to opioid overdoses and sits on the unsecured creditors committee that has worked on the Purdue settlement. She's frustrated by what she sees as another delay in billions of dollars expected from the Purdue settlement to be used for more addiction treatment and prevention.

"That's six billion dollars laying on the line that could be out there saving people right now," she said. "I think it's definitely an unnecessary delay. I think the courts have already decided and the government wasn't happy with their decision and they're just going to keep pushing and pushing, and it's lives being lost that I'm most upset with."

The new wrinkle from the court centers on a longstanding dispute in the bankruptcy: whether members of the Sackler family, which owns Purdue, can be shielded from future liability connected to lawsuits over the company's painkiller Oxycontin. The powerful narcotic has been central to the decades-long opioid epidemic.

The bankruptcy agreement would shield Sackler family members from lawsuits brought by overdose victims and victims' family members. An appeals court reviewed the deal for more than a year before signing off on it. The Department of Justice has objected to the protection for the Sacklers, and on Thursday the Supreme Court sided with the government, staying the bankruptcy until a December appeal.

Some Massachusetts advocates, including Juaire, previously asked the DOJ not to appeal. While they are incensed at the Sacklers and aghast that members of the family may walk away without further liability, they said it was more important to get the funding to end the overdose crisis than to secure blame or an apology from the family.

Lower courts have split on whether these types of personal liability shields should be allowed as part of corporate bankruptcies, so it was inevitable that the Supreme Court would step in, according to David Schumacher, an attorney with the firm Hooper, Lundy and Bookman and former head of the Massachusetts U.S. attorney office's health care fraud unit.

"It's not terribly unusual, certainly for this Supreme Court, which is an activist Supreme Court and not at all afraid to get involved with important matters of public policy," he said. "It's also not unusual because it's one of the most important purposes that the Supreme Court serves: to resolve disputes when the lower courts come out different ways on a question."

The temporary delay may stretch well beyond December's hearing and could affect other corporate bankruptcy cases, Schumacher said. If the high court decides the personal liability shield is illegal, then the bankruptcy goes back into negotiations.

"The Supreme Court has been more pro-business lately and so you might reflexively think, 'Oh, well, they're probably going to come out on the side of Purdue and the Sacklers.' " he said. "But that may not necessarily be the case because it involves real technical matters under the federal statutory bankruptcy code, so the traditional conservative liberal split may not hold here."