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CT AG Tong slams Purdue Pharma's proposed bankruptcy settlement

The attorney general says it grants "a lifetime legal shield to the Sackler family."

HARTFORD, Conn. — Connecticut's attorney general has slammed the proposed bankruptcy settlement with Purdue Pharma, saying it grants "a lifetime legal shield to the Sackler family."

William Tong said Wednesday that he plans to appeal the decision alongside other states. 

Earlier Wednesday, a federal bankruptcy judge gave conditional approval to a sweeping, potentially $10 billion plan submitted by OxyContin maker Purdue Pharma to settle a mountain of lawsuits over its role in the opioid crisis that has killed a half-million Americans over the past two decades.

Under the settlement reached with creditors including individual victims and thousands of state and local governments, the Sackler family will give up ownership of the company and contribute $4.5 billion but will be freed from any future lawsuits over opioids.

RELATED: Judge conditionally approves Purdue Pharma opioid settlement

Tong along with some other states plans to appeal the ruling. Washington state Attorney General Bob Ferguson quickly announced he would appeal the plan, calling it inadequate.

Nine states, Washington, D.C., the city of Seattle and the U.S. bankruptcy trustee, which seeks to protect the nation’s bankruptcy system, opposed the settlement, largely because of the protections granted to the Sackler family. At least some of them are expected to appeal.

A lawyer for Purdue Pharma said last week that a judge needs to accept the OxyContin maker's plan to settle thousands of lawsuits over the opioid epidemic or face "years or decades of Hobbesian hell" with complicated litigation that would not result in fair payouts to abate the epidemic or pay individual victims.

The bankruptcy judge, based in White Plains, New York, had urged the holdouts to negotiate an agreement, warning that drawn-out litigation would delay getting settlement money to victims and the programs needed to address the epidemic.

“Our bankruptcy system is broken. Connecticut is prepared to appeal, and we are weighing all viable options to preserve our claims against the Sacklers,” said Tong in a statement. “The Sacklers are not bankrupt, and they should not be allowed to manipulate bankruptcy laws to evade justice and protect their blood money."

He continued: "This decision is a slap in the face to the millions of suffering and grieving Americans who have lost their lives and loved ones due to the Sacklers calculated and craven pursuit of opioid profits. We need bankruptcy reform now to close the non-debtor release loophole to ensure wealthy bad actors cannot misuse our bankruptcy courts."

U.S. Senator Richard Blumenthal issued a statement after the settlement, saying "today’s court decision sanctions the Sacklers’ shameful quest to avoid responsibility for their deliberate, reckless disregard of human life."

He continued: "Hundreds of thousands of American families have been decimated and destroyed because of their greed. Sadly, the court’s interpretation of bankruptcy law has allowed for safe harbor for their ill-gotten riches. This ruling should be an impetus for Congress to enact strong and substantial reforms to the Bankruptcy Code to ensure that future Sacklers cannot follow their immoral example. While Congress works to pass legislation, I urge the U.S. Department of Justice to appeal today’s misguided ruling and demand that the Sacklers be held accountable."

The drugmaker will be reorganized into a new company with a board appointed by public officials and will funnel its profits into government-led efforts to prevent and treat opioid addiction.

RELATED: August 31 declared as Overdose Awareness Day in CT

Also, the settlement sets up a compensation fund that will pay some victims of drug addiction an expected $3,500 to $48,000 each.

U.S. Bankruptcy Judge Robert Drain said Wednesday after speaking from the bench for more than six hours that he would approve the plan as long as two technical changes were made. If so, he said, he will formally enter the decision on Thursday.

He said before his ruling that while he does not have “fondness for the Sacklers or sympathy for them,” collecting money from them through litigation would be complicated.

The settlement comes nearly two years after the Stamford, Connecticut-based company filed for bankruptcy under the weight of some 3,000 lawsuits from states, local governments, Native American tribes, hospitals, unions and other entities. They accuse Purdue Pharma of fueling the crisis by aggressively pushing sales of its best-selling prescription painkiller.

The Sacklers were not given immunity from criminal charges, though there have been no indications they will face any.

State and local governments came to support the plan overwhelmingly, though many did so grudgingly, as did groups representing those harmed by prescription opioids.

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