Purdue Plan Rejection Sets Stage for Liability Release Clarity

Purdue Pharma LP’s planned appeal from a decision to overturn the OxyContin manufacturer’s multi-billion dollar settlement provides an opportunity for the Second Circuit to tackle long-standing legal issues surrounding liability releases in bankruptcy.

The plan releases the Sackler family—Purdue Pharma’s owners—from all liability related to their role in the opioid crisis. In exchange, they collectively made a $4.5 billion contribution to fund the bankruptcy plan.

Judge Colleen McMahon’s decision to nix that deal now places the legality of such releases squarely before the U.S. Court of Appeals for the Second Circuit, said Douglas Baird, a professor at the University of ...