The Bomb and the Bankruptcy

Last month, award-winning author Beth Macy came to Temple Law School to discuss the opioid crisis with a panel of experts, including host Jonathan Lipson (Harold Kohn Professor of Law), attorney Michael Quinn (counsel to a group of opioid survivors and activists), and public-health researcher Evan Anderson (Senior Fellow, Center for Public Health Initiatives, University of Pennsylvania).

In her best-selling books, Dopesick: Dealers, Doctors, and the Drug Company that Addicted America and Raising Lazarus, Macy presents America’s opioid epidemic by interlacing stories of communities in crisis and everyday heroes fighting the crisis with demonstrations of corporate greed through the Purdue Pharma bankruptcy.

Macy noted that the small-town heroes about whom she writes are outliers. She explained that there is little consensus between law enforcement and medical leaders, nor an understanding of how to scale existing programs that may save lives. She urged that we need to make treatment more accessible and implement infrastructure to ensure that the money derived from lawsuit settlements is spent appropriately.

As a harm-reduction researcher, Anderson (a double Owl, with degrees in law (’07) and public health (’15)) highlighted the reasons why many addicts fail to seek medical care. Anderson explained that these include poor treatment in hospitals. “One in four people hospitalized in Philadelphia for opioid use leave against medical advice,” he said. He deemed this a “preventable phenomenon,” explaining that many hospitalizations start as minor problems, such as skin conditions that are then poorly treated and result in abscesses.

Quinn spoke about his work representing a group of opioid activists and survivors in the Purdue Pharma bankruptcy, including photographer Nan Goldin and Emily Walden, leader of the organization Fed Up!. Quinn explained that, as a lawyer whose practice focused mostly on representing artists, the chapter 11 process was opaque and sometimes fraught. “But we knew we wanted transparency, and to hold the Sackler family accountable, because we thought they were using Purdue’s bankruptcy to buy themselves immunity.”

Lipson, who worked informally with Quinn and his group, analogized the opioid crisis to a bomb. “There are many people who contributed to that bomb,” he said, but Purdue Pharma and its owners, the Sackler family, “built the fuse—and lit it twice,” referring to the company’s two sets of criminal pleas.

Macy opened the panel by reading an excerpt of Lazarus depicting a hearing in which Lipson had asked the bankruptcy court in Purdue Pharma to appoint an examiner at the request of his pro bono client, an opioid survivor and activist. Macy described both the bankruptcy judge’s anger about the request and Lipson’s reflections on the fallout.

A fundamental goal of U.S. bankruptcy law is to give corporate debtors a financial “fresh start” from burdensome debts. Chapter 11 bankruptcy was intended to protect businesses and middle-class jobs, Lipson pointed out, not billionaires alleged to have played a pivotal role in a serious public health crisis.

In the Purdue Pharma bankruptcy, the Sackler’s insisted on nondebtor “releases” in exchange for a financial contribution. Lipson explained that while $10 billion from Purdue (including $5 billion from the Sacklers) may go toward abating the opioid crisis, the Sacklers will walk away implicated in two sets of federal drug crimes and with $6 billion derived from those crimes. If the Sacklers are allowed to use bankruptcy to escape the consequences of their actions, it will provide a roadmap for other powerful bad actors, he observed.

It remains to be seen what will happen next. Although the bankruptcy court approved the Sackler releases, the district court (sitting in an appellate capacity) reversed. Purdue Pharma and the Sackler family await a ruling on the further appeal to the Second Circuit Court of Appeals.

 

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