Tort

Supreme Court Decision Reshapes Future of Mass Tort Bankruptcies, Limits Legal Shields for Non-Debtors

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NEW YORK — The Uamsung the decision by the Supreme Court could signal a pivot in the way corporations may use bankruptcy proceedings to settle massive lawsuits. This follows a recent decision which invalidated a key part of the agreement that would have resolved multidistrict litigation against Purdue Pharma, the manufacturer of OxyContin. The court ruled against the ability of bankruptcy courts to absolve claims directed at third parties who have not themselves declared bankruptcy—a standard practice that had been utilized by firms facing sizable litigation burdens. For years, bankruptcy courts provided a setting allowing … Read more

Supreme Court Delivers Landmark Ruling in Purdue Pharma Bankruptcy, Shaping Future of Mass Tort Cases

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WASHINGTON — A recent Supreme Court decision has resoundingly reshaped the landscape of bankruptcy law, particularly in how it pertains to mass tort litigations, exemplified by the high-profile Purdue Pharma bankruptcy case. At the heart of this judicial review was a debated proposal to exempt the Sackler family — owners of Purdue Pharma and makers of OxyContin — from future civil lawsuits while committing them to pay $6 billion into a settlement fund for victims of the opioid crisis. Purdue Pharma entered into bankruptcy in 2019 after facing a slew of lawsuits that attributed much … Read more

Supreme Court Limits Bankruptcy Shield, Forcing Companies to Reassess Settlement Strategies in Mass Tort Cases

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Washington — The recent U.S. Supreme Court ruling has significantly impacted how bankruptcy can be employed, particularly in mass tort litigations involving organizations like Purdue Pharma, the makers of OxyContin. The court has curtailed the scope of bankruptcy courts, specifically rescinding their authority to dismiss legal claims against non-debtors without the explicit consent of the involved parties. Historically, bankruptcy proceedings have provided a robust mechanism for organizations to manage and settle widespread legal challenges, including cases related to sexual abuse and consumer products linked to health issues. Such procedures allowed for the automatic halting of … Read more

Supreme Court Decision Reshapes Bankruptcy Strategy, Limits Liability Shields for Non-Debtors in Mass Tort Settlements

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New York — A recent Supreme Court decision has potentially narrowed the utility of bankruptcy as a tactic for resolving extensive lawsuits, impacting strategies employed by large organizations such as the Catholic dioceses, Boy Scouts of America, and opioid manufacturers. The ruling denied the ability of bankruptcy courts to clear legal claims against affiliated parties that have not themselves sought bankruptcy protection, a strategy previously available and frequently utilized in mass tort litigation. Historically, bankruptcy courts have offered valuable tools for entities crushed by substantial legal challenges. These tools include a stay on existing litigation, … Read more