What did the Supreme Court decide in the Purdue case?
In Harrington v. Purdue Pharma (2024), the court held that the Bankruptcy Code does not permit non-consensual releases of claims against people who have not themselves declared bankruptcy — a ruling with consequences well beyond Purdue.
In June 2024, in Harrington v. Purdue Pharma, the Supreme Court held that the Bankruptcy Code does not authorise non-consensual releases of claims against non-debtors, meaning the Sacklers could not be shielded from lawsuits by people who had not agreed to release them. As PBS reported, the court rejected the earlier plan because it gave the family protection even though they had not declared bankruptcy personally.
The ruling vacated the confirmed plan and forced about a year of renewed mediation. It was significant well beyond Purdue: it curtailed a strategy that other companies facing mass litigation had used to protect related parties. The replacement plan adopted an opt-in approach, under which creditors could choose whether to release the Sacklers, and those who did not could still sue.