A $6 Billion Settlement Threatens to Upend US Bankruptcy Deals

Members of the Sackler family who profited from the sale of OxyContin may inadvertently upend the way almost every big settlement is carried out in bankruptcy court.

The Supreme Court on Monday will consider the Biden administration’s bid to scuttle a $6 billion accord between bankrupt drugmaker Purdue Pharma LP and its billionaire owners. The deal would protect members of the Sackler family from future opioid lawsuits by way of an oft-used legal mechanism that the high court is now scrutinizing for the first time.

If upheld, the settlement would snuff out an inferno of civil lawsuits blaming Purdue’s owners ...