Dec 6 (Reuters) – Associates of the Sackler relatives on Monday said billions of pounds they collected from Purdue Pharma just before the corporation submitted for Chapter 11 was the final result of additional hard cash, not aspect of a “magic formula plan” to abuse the bankruptcy procedure.

In court papers, attorneys for the Sackler family users, who managed Purdue, turned down U.S. District Decide Colleen McMahon’s suggestion that the much more than $10 billion Purdue paid out out in the several years major up to the 2019 individual bankruptcy could sum to an abuse of the Chapter 11 procedure. All around half of the cash went to taxes or business enterprise investments, according to court files.

The Sacklers are alleged to have drained Purdue of dollars more than various a long time. When it finally filed for bankruptcy in the experience of lawsuits above the epidemic, the corporation desired Sacklers’ income to settle the billions of pounds of lawful statements. In return, the Sacklers have been in a position to desire safety from the lawsuits.

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The Sacklers turned down the notion that there was any “plan” to “intentionally weaken Purdue so it could not reorganize with no” their economical contribution.

There is no proof to propose the payments “were designed as part of a magic formula plan” to abuse the bankruptcy program, the Sackler lawyers stated. They called the notion “pure fiction.”

McMahon is contemplating no matter if to overturn a bankruptcy courtroom ruling that shields the Sacklers from legal responsibility around the opioid epidemic. If she finds that there is enough evidence of abuse, she could ship the matter back to the individual bankruptcy court to rethink the protect.

Extra than 500,000 people today have died from opioid overdoses because 1999, according to the Facilities for Illness Management and Prevention.

The payments, the Sacklers argued, were being manufactured as company grew, which includes enhanced earnings next the restoration of Purdue’s patent for OxyContin in 2008.

The Sacklers, who have denied wrongdoing and did not file for bankruptcy them selves, have contributed about $4.5 billion to a settlement of opioid-linked litigation in exchange for defense in opposition to potential lawsuits.

Purdue argued in a individual submitting on Monday that the protections are necessary simply because the organization cannot exit bankruptcy devoid of resolving opioid-relevant promises in opposition to each Purdue and the Sacklers.

The U.S. Department of Justice’s individual bankruptcy watchdog, the U.S. Trustee, has prolonged opposed this kind of litigation protect and mentioned on Monday in courtroom filings that the legislation offers no such protections for men and women who have not submitted for bankruptcy.

The U.S. Trustee accused the Sacklers of “piggybacking” off Purdue’s bankruptcy to secure on their own.

“If this is not abuse of the personal bankruptcy procedure, it is unclear what is,” the trustee reported.

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Reporting by Maria Chutchian Enhancing by Noeleen Walder, Bernadette Baum and Mark Porter

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