Analysis-US Supreme Court Purdue ruling makes mass torts tougher to resolve in bankruptcy

FILE PHOTO: Bottles of prescription painkiller OxyContin made by Purdue Pharma LP on a counter at a local pharmacy in ProvoNEW YORK - Bankruptcy may become a less attractive way to resolve sprawling lawsuits after a U.S. Supreme Court ruling scuttled OxyContin maker Purdue Pharma's Chapter 11 settlement and sharply scaled back a court's ability to wipe away legal claims against entities that have not filed for bankruptcy themselves.

The Supreme Court with Thursday's Purdue decision took that option off the table, ruling that nothing in U.S. bankruptcy law allows courts to release legal claims against non-debtors without the consent of the people who sued them. Without legal protections for the Sacklers, communities and individuals harmed by the opioid crisis risk losing $7 billion in funding, most of which was provided by the Sackler settlement, Kavanaugh wrote.

Outside of bankruptcy, mass torts can result in a "race to the courthouse" and a never-ending series of "lottery-like" trials, in which some claimants get massive payouts and others get nothing, tort reform advocates say. However, once a bankruptcy court dismissed Aearo's Chapter 11 as an improper effort to shield 3M from lawsuits, it quickly reached a $6 billion settlement outside of bankruptcy.Dave Ramsey is an immensely popular financial guru who focuses on getting and keeping people out of debt on their path to financial freedom. His empire of books, podcasts and other financial media all...

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