In a new piece in the American Prospect, many bankruptcy experts maintain that the bankruptcy case of Purdue Pharma (maker of OxyContin) is a sign of a broken Chapter 11 system. The Sackler family, in order to be released from any personal liability in the many lawsuits that have been filed against them, are relying on logic that has been used in past cases to compensate asbestos victims.
“The central idea of bankruptcy is to gather up all the debtor’s property and distribute it to creditors in an orderly manner,” Professor Ralph Brubaker said.
What happened, Brubaker says, is that lawyers began convincing some judges to use the idea of a liability release to go beyond protecting the property of the bankrupt company, to protecting people who aren’t in bankruptcy.
“It’s been twisted to do something that wasn’t originally intended: to release somebody from personal liability,” Brubaker said.
Read the full article at prospect.org.