WASHINGTON, D.C.] – U.S. Senators Richard Blumenthal (D-CT) and Elizabeth Warren (D-MA) introduced the Stop Shielding Assets from Corporate Known Liability by Eliminating Non-Debtor Releases (SACKLER) Act, which would close a loophole in current law that allows individuals who have engaged in wrongdoing to evade accountability through bankruptcy proceedings. The SACKLER Act would restrict the use of a loophole in bankruptcy law that currently allows individuals who have not filed for bankruptcy to nonetheless be released from lawsuits brought by states, Tribes, municipalities, or the U.S. government.
While far from bankrupt and worth nearly $11 billion, the Sackler family – owners of Purdue Pharma – is exploiting this loophole in the company’s bankruptcy proceedings to seek a lifetime legal shield from liability. The proposed Purdue bankruptcy plan, which Connecticut has strongly objected to, would require the Sacklers to pay over nine years only a small fraction of the massive fortune that they amassed through the sale of opioids.
“This legislation to close an unfair, unacceptable loophole in the bankruptcy code would remove one of the barriers preventing the Sacklers from being held accountable,” said Blumenthal. “The Sackler family wants to deny the victims justice by being given a lifetime legal shield that is absolutely unjust. Bankruptcy should not be a haven for people who owe accountability – a haven from justice.”
“We must close these dangerous loopholes that have allowed the bankruptcy system to unfairly protect wealthy individuals, like members of the Sackler family, from government-led lawsuits,” said Warren.
The legislation was introduced in the House of Representatives in March by U.S. Representatives Carolyn Maloney (D-NY), Mark DeSaulnier (D-CA), and sixty-two of their colleagues.
According to the Centers for Disease Control and Prevention (CDC), there were nearly 500,000 deaths between 1999 and 2019, and 93,000 deaths in 2020 alone involving opioid and prescription overdoses, of which Purdue greatly contributed to. The company has pled guilty to multiple federal crimes and is facing thousands of lawsuits for its deceptive marketing practices and its role in the epidemic.
Blumenthal announced the legislation today with Connecticut Attorney General William Tong who will testify before the U.S. House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law this week on this proposal and others to reform bankruptcy law.
Earlier today, Blumenthal also led a group of his colleagues in a letter to a judge for the United States Bankruptcy Court for the Southern District of New York, urging the court to reject Purdue Pharma’s request to include employee and executive bonuses in the bankruptcy reorganization plan.
This press release is made possible by: