HARTFORD, Conn — The fight for accountability continues as Senator Richard Blumenthal and State Attorney General William Tong announced a proposal for non-debtor bankruptcy reform Monday.
The Stop Shielding Assets from Corporate Known Liability by Eliminating Non-Debtor Releases (SACKLER) Act would close a loophole in bankruptcy law that would allow individuals to evade government claims.
This loophole, which AG Tong and Sen. Blumenthal say is used by the Sackler family, owners of opioid manufacturer Purdue Pharma, allows members of the family to evade responsibility for their actions.
In 2007, Sen. Blumenthal took legal action against Purdue Pharma, which led to criminal charges against at least three senior executives.
"You would have thought that back then they got the message. Unfortunately, they did not. Instead of helping us put out a fire that they started, Purdue Pharma and the Sacklers poured gasoline on it," AG Tong said. "The opioid addiction crisis, apart from COVID, is the worst public health crisis there. So, we are here today because what the Sackers are trying to do is an outrage."
The pair spoke outside the state capitol, where AG Tong reemphasized his stance against the proposed Purdue bankruptcy plan, which 15 states, including New York and Massachusetts, have already agreed to.
AG Tong maintains the settlement is not enough.
“I’m a no because of the 1,300 families. Because of the tremendous damage done to our state. Because this deal, 4.2 billion dollars, is not even close to enough justice for families in Connecticut,” he said.
The current settlement would require the Sacklers to pay the $4.2 billion sum over the course of nine years.
AG Tong and Sen. Blumenthal said the payment is only a small fraction of the fortune the family has amassed through the sale of opioids. They said that while the Sacklers get richer, justice is not served.
The legislation Sen. Blumenthal and AG Tong plan to introduce, they say, will set a precedent for justice in non-debtor bankruptcy cases.
"This will impose justice, not only in this case but in lawsuits against USA Gymnastics by the gymnasts who suffered physical abuse from coaches and trainers. Boy Scouts who suffered sexual assault. Bankruptcy should not be a Safe Harbor from accountability. That's what the bankruptcy code does," Sen. Blumenthal said.
Sen. Blumenthal said he is working with Massachusetts Senator Elizabeth Warren and New York Representative Jerrold Nadler on the legislation. He said he is reaching out to the 15 states that have already agreed to the $4.2 billion settlement. He said he is expecting strong bipartisan support.
AG Tong said Washington and California are in support of the act as well.
They plan to push forward with the legislation so it will affect both the Sackler case and non-debtor bankruptcy claims in the future.
As for a settlement Connecticut will accept, AG Tong said there will never be enough money or justice for the victims, but that a $26 billion settlement would represent a real investment by the Sacklers in fighting the opioid and addiction crisis.
"I haven't seen a willingness on their part to do anything meaningful," AG Tong said. "And when I see that, they can give me a call."
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