The question
Whether the bankruptcy code lets a Chapter 11 plan release the Sackler family from opioid lawsuits without the consent of the people suing them.
Harrington v. Purdue Pharma L.P.
What the Court decided
The Court blocked the Purdue Pharma bankruptcy settlement. It held that the bankruptcy code does not allow a reorganization plan to wipe out lawsuits against the Sackler family, who owned Purdue but did not themselves file for bankruptcy, without the consent of the victims bringing those claims. The ruling undid a deal that shielded the Sacklers in exchange for billions of dollars.
How the justices split
5-4The Court's opinion
Gorsuch, joined by Thomas, Alito, Barrett, Jackson
The bankruptcy code lets a plan discharge the debts of the person or company that files for bankruptcy. It does not authorize releasing the claims of victims against a third party, here the Sackler family, who never filed for bankruptcy and never put their own assets on the line. Only Congress could authorize such a release.
Dissenting
Kavanaugh, joined by Roberts, Sotomayor, Kagan
The dissent argued that nonconsensual third-party releases are a long-accepted tool that made this and many mass-tort bankruptcies work, and that the ruling upends a settlement that would have delivered billions of dollars to opioid victims who now may recover far less.
How we know · 3 sourced claims
The Court held the bankruptcy code does not authorize releasing claims against a nondebtor without the affected claimants' consent.
Source: syllabus, Held, at 23-124
The ruling blocked the release of the Sackler family from opioid claims in Purdue's reorganization.
Source: opinion of the Court (Gorsuch, J.)
Gorsuch, J., wrote for the Court; Kavanaugh, J., dissented, joined by Roberts, C.J., and Sotomayor and Kagan, JJ.
Source: syllabus, lineup