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Purdue bankruptcy judge extends temporary litigation shield for Sacklers -Breaking

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© Reuters. FILEPHOTO: OxyContin prescription pills 40mg, manufactured by Purdue Pharma L.D. The OxyContin 40mg pills are displayed on shelves at local pharmacies in Provo (Utah), U.S.A. April 25, 2017. REUTERS/George Frey/File Photograph

By Maria Chutchian

(Reuters) – A bankruptcy judge has extended temporary protections against opioid-related litigation for the Sackler family members who own Purdue Pharma until Feb. 1 after another judge overturned the OxyContin maker’s bankruptcy settlement this month.

Robert Drain (U.S. Bankruptcy) extended Wednesday’s litigation shield, giving Purdue the opportunity to meet with the Sacklers about a possible path. The judge in September had approved Purdue’s reorganization plan and underlying settlement that aimed to resolve widespread litigation accusing the company and the Sacklers of fueling the U.S. opioid epidemic through deceptive marketing.

For $4.5billion, the Settlement provided Sacklers with protection from opioid-related lawsuits. The plan would also allow for money to be directed towards opioid prevention efforts. The protections, known as nondebtor releases, prompted appeals from several states and the U.S. Department of Justice’s bankruptcy watchdog.

U.S. District Judge Colleen McMahon reversed Drain’s approval of the deal on Dec. 16, finding the bankruptcy court did not have authority to grant the releases. Purdue intends to appeal the decision. Drain was then requested to extend temporary protections to Sacklers, who had been in effect for more than two years.

The protections in place were due to expire Thursday. This means that lawsuits could be resumed if there was no extension.

Drain approved Purdue’s request over objections from two states that argued that negotiations would be more effective without the shield.

He also warned that if the parties, including the Sacklers, did not negotiate in good faith over the next month on an amended deal, there would be “consequences.”

The request for comment was not answered by a lawyer representing Washington and Connecticut.

The reorganization plan obtained support from 95% of the company’s creditors, which were largely plaintiffs suing Purdue and the Sacklers.

Purdue filed for bankruptcy September 2019, after it was faced with 3,000 lawsuits that accused the company, Sackler and their family members of contributing towards a public-health crisis that claimed nearly 500,000 lives since 1999.

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