High Court Rejection of Sackler Shield Upends Bankruptcy Law (1)

The US Supreme Court’s decision striking down the liability shield granted to the billionaire Sackler family members who own Purdue Pharma LP will reverberate throughout the bankruptcy world and shape corporate restructurings that go far beyond the OxyContin maker.

The high court ruled that liability releases afforded the Sacklers under Purdue’s bankruptcy plan and $6 billion litigation settlement are impermissible because they were obtained without the consent of some people who sued over the company’s opioid sales tactics. The decision answered what has perhaps been the most hotly contested issue in bankruptcy law: whether releases granted to nonbankrupt entities and ...