AG Balks at Sanctions Play in Purdue Bankruptcy Case

HARTFORD, Conn. (CN) — “Colossally idiotic.” Connecticut Attorney General William Tong had harsh words Friday when attorneys representing the family who owns the bankrupt OxyContin maker Purdue Pharma threatened a demand for sanctions against four states and the District of Columbia.

Purdue, which pleaded guilty last November for its role in contributing to the nation’s opioid epidemic, is seeking Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in the Southern District of New York. Many states have opposed Purdue’s bankruptcy reorganization, however, as they seek further liability from Purdue’s owners. Specifically, the states say individual members of the Sackler family directed marketing that misled the doctors who wrote OxyContin prescriptions and the patients given the addictive painkiller recklessly.

Connecticut is among of group of holdouts that have objected to a settlement that Purdue reached last week with 15 states, including New York and Massachusetts. Among other terms, the settling states have agreed to support Purdue Pharma’s bankruptcy reorganization plan in exchange for the release of 33 million documents and $50 million from the Sacklers.

Tong on Friday said the Sackler’s attorneys sent an email the previous day with a motion for sanctions, complete with about 165 pages of exhibits, against Connecticut, California, Maryland, Rhode Island and the District of Columbia.

A firm representing the Sackler family declined to comment.

In the draft motion, the Sackler family’s attorneys said they sought the sanctions, including fees and reprimands, because the states made allegations that lacked evidence.

One example quoted in the filing is that Connecticut ignored the Sacklers’ demand that it produce documents to back up its allegation that the family engaged in “Knowing Participation in Deception."

“There is no evidence that Beverly, David, Jonathan or Richard Sackler had any involvement in the drafting or approval of the content of marketing material or what sales representatives said, were authorized to say or prohibited from saying during the Relevant Period,” the draft motion states.

As for the timing, attorneys for the Sackler family wrote that they were serving the draft 21 days before they intended to file it to give the states an opportunity to back up their assertions.

Tong said the Sackler family attorneys withdrew the motion Friday morning “after they got tremendous blowback from a lot of different parties” for the move.

In a sharp series of comments, Tong described the withdrawn proposal as a threat against his state, “an organized crime family intimidation tactic" and “colossally idiotic.”

Tong said he made the allegations at issue in a complaint filed more than two years ago, and the last-minute filing was an attempt to pressure the state to accept a settlement proposal.

“The Sacklers are trying to use the company’s bankruptcy to shield themselves from liability and from paying what they ought to pay for their role in causing and fueling the opioid crisis," Tong said.

Adding that he has “opposed them very aggressively,” Tong said he planned to object to the settlement plan on Monday.

The pharmaceutical company’s headquarters rests in Stamford, Connecticut, the same city where Tong resides.

While the draft motion says Purdue supplied the state attorney generals with discovery in the millions of pages, Tong said in a statement Friday about the draft motion that there was more he wanted to uncover.

“If the Sacklers have any doubt about the strength of our allegations, they should produce each and every document currently hidden under protective order or cloaked under claims of privilege and each of them take the stand so that I can personally question them and expose the depths of their misconduct,” he said.

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