Judge Colleen McMahon of the U.S. District Court in Manhattan has allowed work to continue on implementation of a controversial bankruptcy plan for Oxycontin producer Purdue Pharma after originally supporting a stay, reports NPR. In her ruling, she said work on the settlement, valued at between $5 and $10 billion, can go forward.
In the past, appeals courts have been reluctant to second-guess federal bankruptcy settlements once they’ve been partially consummated — a procedural roadblock known as “equitable mootness.” In her ruling, McMahon acknowledged that equitable mootness was a “serious concern” in this case. She ordered supporters of the Purdue Pharma plan to enter written agreements that they won’t try to block an appeal using the equitable mootness argument. McMahon signaled she believes there are significant legal questions raised by the complex settlement that warrant review by the Second Circuit Court of Appeals. She pointed in particular to a provision of the deal that would grant immunity from opioid lawsuits to members of the Sackler family who own the drug firm.