Purdue Pharma Owners Were Wary Of Lawsuits Before Moving $10 Billion From Company
The Sackler family, owners of Purdue Pharma LP, have been front and center in the nation’s opioid crisis over the last decade. The crisis has taken over 450,000 lives since 1999 and prescription drugs like OxyContin and fentanyl have been the culprit in many cases.
Purdue Pharma, maker of OxyContin, has been in the midst of bankruptcy proceedings that resulted from a legal onslaught which culminated in an $8 billion settlement with the DOJ and criminal charges for misconduct relating to opioids. The Sackler family paid $225 million to settle civil claims.
New documents that have been made available during bankruptcy proceedings show the family had discussed the potential for litigation exposure as early as 2007, which Reuters noted was a full decade before the company stopped making significant financial transfers from the company totaling $10 billion – a move lawyers for creditors may allege was to shield assets. The company now faces roughly 3,000 legal actions.
“I don’t believe anyone knew that lawsuits that really began in earnest in 2017 would be coming back in 2008,” David Sackler told congress last week. But his uncle wrote in an e-mail as far back as March 2007 that “if there’s a future perception that Purdue has screwed up on compliance, we could get murdered” and that the family was “not really braced for the emergence of numerous new lawsuits”.
Sackler himself wrote in May 2007: “Well, I hope you’re right and under logical circumstances I’d agree with you, but we’re living in America. This is the land of the free and the home of the blameless. We will be sued. Read the op-ed stuff in these local papers and ask yourself how long it will take these lawyers to figure out that we might settle with them if they can freeze our assets and threaten us.”
His lawyers argue that this message was sent before he joined the Board, and thus, he had little insight into the company’s affairs.
The Sackler family, who moved $10 billion out of the company with Sackler controlled entities receiving about $4 billion, said: “We supported the release of documents by the court and reaffirm that members of the Sackler family who served on Purdue’s board of directors acted ethically and lawfully in every regard. These cherrypicked snippets of emails ignore the full context of what they say and the rest of the legal filings, all of which demonstrate how the fraudulent conveyance claims are entirely without merit.”
Massachusetts Attorney General Maura Healey disagreed, stating: “The Sacklers told Congress they did nothing wrong. The evidence tells a different story – they got rich fueling the opioid crisis and plan to walk away billionaires.”
The family also “pursued acquiring additional product liability insurance and explored selling Purdue outright to offload its troubles,” according to court documents. Patriarch Mortimer Sackler insisted to company president Richard Sackler in 2008 that he sell the company, writing in an email:
“Fundamentally, we don’t want to stay in this business anymore (given the horrible risks, outlooks, difficulties, etc) and I think the majority of your family feels the same way.It is simply not prudent for us to stay in the business given the future risks we are sure to face and the impact they will have on the shareholder value of the business and hence the family’s wealth.”
“We also fully acknowledge that there is an opioid crisis that has ruined too many lives and that OxyContin addiction and abuse played a role in that. We are truly sorry to everyone who’s lost a family member or suffered from the scourge of addiction,” David Sackler told Congress last week.
Mon, 12/21/2020 – 20:00