3 ms·

I think it boils down to whether laundering money should be legal. As far as I know, it is, in this sense. - Everybody acknowledges Purdue Pharma broke the law

by ethbr0 3y ago

I think it boils down to whether laundering money should be legal. As far as I know, it is, in this sense. - Everybody acknowledges Purdue Pharma broke the law and acted unethically. - Everyone acknowledges Purdue Pharma made a lot of money directly from doing the above. - Everyone acknowledges the Sackler family took a lot of money out of Purdue Pharma, including after they specifically knew Purdue Pharma was likely to pay judgements for the above. - What's unclear is how we should treat the Sackler money as a result of all of this. Bankruptcy law, as I understand it, limits itself to the possibly-enforceable and attempts to generate the best outcome for creditors. Which by definition involves negotiation between profiteering owners (who want to give up as little of their ill-gotten money as possible) and creditors (who want as much money as possible). And since, at the end of the day, owners can always hide money overseas or in trusts... creditors have an incentive to settle for less-than-everything. So this is less about criminal culpability and more about negotiation.

londons_explore 3y ago
Hasn't this area of law been pretty much static for 100+ years? Surely this exact case has happened before? It's gotta be pretty common for a company to be wildly profitable for a while, then suddenly bankrupt, and some owners have extracted all the profits in the meantime.
- ethbr0 3y ago
  I think the difference here is that it was a family company (providing a "singular" benefiting target to vilify and pursue) and the number of aggrieved parties. If it were instead 1,000 different shareholders and corporate officers, I think the public would have lost interest.
  - dylan604 3y ago
    I think this is downplaying the effect of the devastation their actions have caused. Pretty much everyone knows someone impacted by their products. As the degrees of separation increases, so does the number of people brought into the world of addiction. personally, i know many people that have opiate addictions, and not one of them was introduced to them from buying them on the street or were addicts of anything prior.
    - ethbr0 3y ago
      I'm just disappointed by how fixated the media gets when there's a person or family involved (e.g. Martin Shkreli, Elizabeth Holmes) but how hard it is to keep public attention absent that (e.g. insulin prices).
      - Haga 3y ago
        [dead]
- tomatocracy 3y ago
  No idea if they're completely unique but the legal circumstances here appear to me to be at least unusual so this certainly isnt a common company bankruptcy story: shareholders agreed to pay money into the bankruptcy estate of the companies in return for a release of related, but separate, litigation claims from third parties against them.
  - ethbr0 3y ago
    From my reading, trading money into a bankruptcy pot in exchange for personal liability protection didn't seem that unusual and is apparently commonplace nowadays. Whether it should be or not... probably not. But then we'd need much tougher laws to compel compliance with personal judgements as a consequence of bankruptcy proceedings (e.g. revoking citizenship, foreign country cooperation, etc). If we removed the possibility for liability protection as part of a deal, shareholders would have less incentive to cooperate financially, and so there'd need to be a bigger enforcement stick to balance the equation.
    - tomatocracy 3y ago
      I guess there's a spectrum - at one end are consensual settlements, in the middle somewhere are non-consensual settlements of claims where party A is suing party B because party B did something to reduce the value of party A's claim in the bankruptcy estate, and at the most controversial end (like this case) are non-consensual settlements of cases where party A sues both the bankrupt company and party B over something they both did. The fact that this got overturned on initial appeal and then the original agreement reinstated on further appeal does suggest that it's at least legally controversial. The arguments made by the court seem reasonable enough (that this may be the best chance for those suing the Sacklers to get any money out of them given the jurisdiction and counterclaim issues, and that the litigation would likely be expensive and time-consuming if it were to proceed) but I suppose it will strike many as odd that a bankruptcy court gets to make that judgment (and without actually hearing the cases themselves).

by ethbr0 3y ago

londons_explore 3y ago

Hasn't this area of law been pretty much static for 100+ years? Surely this exact case has happened before? It's gotta be pretty common for a company to be wildly profitable for a while, then suddenly bankrupt, and some owners have extracted all the profits in the meantime.

ethbr0 3y ago
I think the difference here is that it was a family company (providing a "singular" benefiting target to vilify and pursue) and the number of aggrieved parties. If it were instead 1,000 different shareholders and corporate officers, I think the public would have lost interest.
- dylan604 3y ago
  I think this is downplaying the effect of the devastation their actions have caused. Pretty much everyone knows someone impacted by their products. As the degrees of separation increases, so does the number of people brought into the world of addiction. personally, i know many people that have opiate addictions, and not one of them was introduced to them from buying them on the street or were addicts of anything prior.
  - ethbr0 3y ago
    I'm just disappointed by how fixated the media gets when there's a person or family involved (e.g. Martin Shkreli, Elizabeth Holmes) but how hard it is to keep public attention absent that (e.g. insulin prices).
    - Haga 3y ago
      [dead]
tomatocracy 3y ago
No idea if they're completely unique but the legal circumstances here appear to me to be at least unusual so this certainly isnt a common company bankruptcy story: shareholders agreed to pay money into the bankruptcy estate of the companies in return for a release of related, but separate, litigation claims from third parties against them.
- ethbr0 3y ago
  From my reading, trading money into a bankruptcy pot in exchange for personal liability protection didn't seem that unusual and is apparently commonplace nowadays. Whether it should be or not... probably not. But then we'd need much tougher laws to compel compliance with personal judgements as a consequence of bankruptcy proceedings (e.g. revoking citizenship, foreign country cooperation, etc). If we removed the possibility for liability protection as part of a deal, shareholders would have less incentive to cooperate financially, and so there'd need to be a bigger enforcement stick to balance the equation.
  - tomatocracy 3y ago
    I guess there's a spectrum - at one end are consensual settlements, in the middle somewhere are non-consensual settlements of claims where party A is suing party B because party B did something to reduce the value of party A's claim in the bankruptcy estate, and at the most controversial end (like this case) are non-consensual settlements of cases where party A sues both the bankrupt company and party B over something they both did. The fact that this got overturned on initial appeal and then the original agreement reinstated on further appeal does suggest that it's at least legally controversial. The arguments made by the court seem reasonable enough (that this may be the best chance for those suing the Sacklers to get any money out of them given the jurisdiction and counterclaim issues, and that the litigation would likely be expensive and time-consuming if it were to proceed) but I suppose it will strike many as odd that a bankruptcy court gets to make that judgment (and without actually hearing the cases themselves).