By Dietrich Knauth
Oct 28 (Reuters) – A US bankruptcy judge on Wednesday ruled that Richard Sackler and his wife Lin Gao must stop interfering with efforts to sell their Connecticut mansion to help pay for Purdue Pharma’s $7.4 billion bankruptcy settlement with opioid claimants.
US Bankruptcy Judge Sean Lane in White Plains, New York, had previously ruled that the residence at 60 Field Point Circle in Greenwich was among the assets that Sackler family members pledged as collateral to pay the settlement.
The Sackler family members who owned Purdue Pharma until the end of its bankruptcy are funding most of the company’s settlement. The settlement, most of which will be paid to state and local governments, resolved tens of thousands of lawsuits over the company’s aggressive marketing of its painkiller Oxycontin and its role in fueling the US opioid epidemic.
At Wednesday’s hearing, Lane rejected the couple’s request to reconsider his earlier ruling, and their request to pause any sale. Court documents do not estimate the home’s market value, but it was sold internally from one Sackler trust to another in order to free up funds for a $62 million settlement payment.
Lane said they had violated the letter and spirit of their agreements to fund payments to victims of the opioid crisis.
“This is not a victimless crime your clients are perpetrating,” Lane told Stephan Hornung, a lawyer for the couple. “I am profoundly concerned about the victims of the opioid epidemic having to wait for what’s their due in terms of getting payment, by virtue of this.”
Lane sometimes expressed frustration with what he characterized as the couple’s refusal to accept the consequences of their settlement.
“The persistent fiction that seems to pervade these papers is that this is Dr. Sackler’s house and Lin Gao’s house. It is not,” Lane said.
Lane did not order the couple to immediately leave the house, but said he was open to that or other sanctions. Lane noted that Richard Sackler owns four other houses, including a primary residence in Florida.
Julia Winters, representing the Sackler family trust in charge of selling assets, said that Lin Gao and her children were still living in the house, which complicated efforts to sell the property and the artwork it contains.
Sackler and Gao plan to appeal the judge’s earlier ruling about the property sale, Hornung said.
Richard Sackler, 81, was a former president and chairman of Purdue who led the company during its aggressive marketing of OxyContin. The company twice pleaded guilty to deceptive marketing of OxyContin, but no member of the Sackler family was charged with any misconduct.
The case is Purdue Pharma, US Bankruptcy Court for the Southern District of New York, No. 19-23649
For Richard Sackler and Lin Gao: Stephan Hornung of Morgan Lewis & Bockius; Anne Penachio of Penachio Malara; and Barry Pollack of Harris Trzaskoma
For Purdue’s master distribution trust: Rachael Ringer of Herbert Smith Freehills Kramer
For the Sackler B Side family trusts: Julia Winters of McDermott Will & Schulte
Read more:
After waiting years for justice, many Purdue opioid victims are defeated — by paperwork
Purdue Pharma receives $5.5 billion sentence, paving way for opioid settlement
(Reporting by Dietrich Knauth in New York)
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