Yes this is a low value comment but I'm speechless. The argument "We potentially screwed up so much that there would be so many people suing us that it would cause legal chaos. So as a result we should be granted full waivers of liability to avoid the lawsuits." Is so brazen as to be absurd.
But the fact it was a successful argument and won is what's astounding.
Unchecked corporate power is a phenomenal national liability.
It is the playbook that CEOs with golden parachutes use as their companies go under, it is the playbook that Adam Neumann used when exiting WeWork, and it is even used by jailed business owners for leniency ("If I'm in jail, I'll have to shut my company and all of my poor employees will lose their jobs")
At some point, though, I do worry that metaphorical pitchforks become real ones. There are literally hundreds of thousands of family members of those who died due to Sacklers' greed, and they get to read that the Sacklers will remain one of the wealthiest families in the world.
> If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem.
- J Paul Getty
- Me
I hope they intervene here and or follow up with criminal charges against the individual Sacklers as individuals.
DoJ can't (except in special circumstances) legally stand in the place of harmed individuals and go after liable actors; because this a bankruptcy case DoJ is involved though, and opposes the settlement, as stated in the article.
https://www.pbs.org/wgbh/frontline/article/holder-big-banks-...
I also remember reading a book about epo and J&J. There the situation also was that the government prosecutors were reluctant to touch the case because they knew J&J would outspend them with their lawyers. Then a private lawyer took on the case and after years reached a settlement but in the process was close to bankrupting his law firm.
Veey easily if you are a big corp and its an existential threat; the DoJ has lots of funding, sure, but also lots of competing priorities.
I am not disputing the existence of the general phenomenon, I am saying the facts of the immediate case (including those directly in the article) contradict the assertion that it is the factor responsible for the decision at issue in the case under discussion.
The incentives associated with having your career tied to elections can end up being suboptimal, so we could debate what the most effective method would be, but it's an example of how a judge can be removed from power by the public.
This seems to be confirmed by the first sentence of the wikipedia article on "Judicial independence", but the second sentence also mentions not being subject to influence from "private or partisan interests".
>Plenty of judges have to renew their mandate by standing for election.
this is mostly a US thing, and only in certain states. Federal judges are appointed AFAIK.
It seems obvious to me that judges apply their own ideologies in their rulings. But IANAL, maybe I'm just too cynical.
We have decided that economic stability and stability in general is more important than honesty, accountability, abiding by the law, or pretty much anything else. If we hold anyone accountable for anything the stock market might go down.
The same seems to happen in politics, but it works a bit differently. If you hold a politician responsible for gross incompetence or worse, such as George Bush Jr. for Iraq WMDs or Donald Trump for January 6th, then they or their allies might retaliate or hold back legislation that you want passed. On top of that extreme partisan division makes this worse by making it virtually impossible to get members of a politician's own party to hold them responsible for anything. I realized recently that extreme partisanship makes it easier for politicians of both sides to get away with bullshit.
She was always struggling with addiction, but never did any form of heroin until she injured herself while walking down a stairwell drunk. She was prescribed OxyContin and quickly became extremely addicted.
My last conversation with her before she died was one where she was desperately begging me to find her any kind of opiate painkiller I could. This was because she had been cut off by her doctor who wouldn't renew her prescription. She ended up procuring some heroin which was apparently laced with fentanyl. She snorted it in her car in the parking lot of a 7-Eleven in Washington DC and overdosed and died in 2015.
I'm not going to pretend like she was living a productive life because she certainly wasn't. I'm also not going to pretend like she wasn't already an addict in other ways. But this product and this evil family who knowingly pushed it into Appalachia and other parts of the US where the residents are ignored by the political parties has caused tremendous damage to many people.
The first time I lost a friend to an overdose on oxycontin was in 2000 when I was a freshman in college. We were in southwestern Virginia, right in the heart of the emerging crisis. He was my co-worker at a Pizza Hut.
Nobody gave a shit about the droves of people dying until it hit New England 15 years later. It was only then that anyone even took notice in the media.
The biggest insult added to this injury for me personally was when I was a contestant in a hackathon for the US health and human services department in 2017. This is the organization that is in charge of the FDA and they had a whole slew of speakers talking about the opioid epidemic. At no point in the entire event did any of these bureaucrats admit any form of culpability and complicity in approving this drug. As far as I know not a single person in the FDA or HHS was ever fired for allowing this horrible product to be pushed like junk food into this country's most forgotten communities.
Just like cannabis was made illegal, to arrest anti-war hippies.
I am vehemently against most aspects of the drug war. I've even grown multiple cannabis plants with a hydroponic system/grow tent I setup in my basement. Heroin and opiates are on a different level due to the physical aspects of the addiction/withdrawal, as well as the effects opiates have on suppressing psychological pain and creating a slippery slope for treatable mental illness to untreatable mental illness.
While I support allowing doctors to administer it in designated, supervised locations, I'm 100% against the Vancouver inspired approaches advocated for by people like Johann Hari. I was once a supporter of these approaches. I witnessed implementation in 3 different communities. I was wrong, and it's an utter disaster. Giving needles to addicts so they can continue to support the black market is a dumb idea. I watched it turn entire neighborhoods into inhospitable hell holes in Asheville, SF, and Vancouver. No thank you.
For any company, not just this example, culpability should stop at the Board, and then any employee of company that willfully commits wrongdoing. The owners should have 100% of their equity at stake, but claimants against actions taken by the company shouldn't pierce the liability curtain of the owners.
Now in this case, at least 8 members of the family did have directorship influence, not just ownership.
I doubt the settlement is just, though I'm not sure some other kind of lawsuit would have been able to retrieve the 4.3 Billion the family is giving up in the settlement. But I'm also fairly certain we don't just want dismantle the notional of limited liability in general
So is it Ok to suck out money and leave the responsibility behind? Is that what limited liability is there for?
I am all for limited liability protecting you from ordinary business failure (allowing people to take some risks). But this goes far beyond that.
Source for this happening? If so it'd fall under fraudulent conveyance. I suspect what actually happened was that they slowly withdrew the money years before bankruptcy or even the lawsuits, which makes it hard to go after them.
>Around the same time, from approximately 2008 to 2018, at the Named Sacklers’ request, billions of dollars were transferred out of Purdue as cash distributions of profits and transfers of assets into Sackler family holding companies and trusts. Certain of these distributions and transfers were made with the intent to hinder future creditors and/or were otherwise voidable as fraudulent transfers.
Edit: Just going through this document makes me wonder how people can carry water for these demons
>The same day, David Sackler replied-all by email: [W]hat do you think is going on in all of these courtrooms right now? We’re rich? For how long? Until which suits get through to the family?
>In or about April 2008, Richard Sackler wrote a memorandum to Kathe Sackler, Ilene Sackler, David Sackler, Jonathan Sackler, and Mortimer D. A. Sackler in which he discussed limiting the Sackler family’s risk in the ownership of Purdue: “[T]he most certain way for the owners to diversify their risk is to distribute more free cash flow so they can purchase diversifying assets.”
These aren't people acting in ignorance, this is family essentially running a legalized drug cartel and has today just protected all their assets. I'm sure the negative externalities of these individuals will cause damage for decades to come in America's heartland.
That's an allegation, not a legal fact nor even an admission. The allegations are included in the settlement to clarify the scope in case there's a subsequent dispute. On its face it sounds plausible, but proving it in a court of law is a different matter entirely.
That seems different than the parent post's claim of withdrawing "shortly before it declared bankruptcy" and closer to my suspicion of "slowly withdrew the money years before bankruptcy".
>Certain of these distributions and transfers were made with the intent to hinder future creditors and/or were otherwise voidable as fraudulent transfers.
This seems to be the problem. It's impossible to prove whether they were doing so to "hinder future creditors" or to simply pay out profits. Not even the state wants to claim all of those distributions were "fraudulent". They only claim certain ones are, presumably the ones near the 2018.
>In or about April 2008, Richard Sackler wrote a memorandum to Kathe Sackler, Ilene Sackler, David Sackler, Jonathan Sackler, and Mortimer D. A. Sackler in which he discussed limiting the Sackler family’s risk in the ownership of Purdue: “[T]he most certain way for the owners to diversify their risk is to distribute more free cash flow so they can purchase diversifying assets.”
>These aren't people acting in ignorance, this is family essentially running a legalized cartel and has today just protected all their assets. I'm sure the negative externalities these individuals have caused will cause damage for decades to come in America's heartland.
I see how that might seem super evil, but then again it's also totally consistent with how you should manage investments. If you made an outsized gain in one asset (eg. because you sat on DOGE from a few years ago and it went to the moon), you shouldn't sit on it. You should diversify it, like selling it and buying other assets.
This just seems like a massively sympathetic view to the company. It's rare for any corporation to distribute most, if not all, of a companies FCF to shareholders. For most public pharmaceutical companies that spending goes to R&D. Furthermore even if you call it "normal", then this kind of shareholder enrichment could be argued to be a gross mismanagement of company funds. Trying to paint this as "normal" is incredibly odd, especially when they call out future litigation as a reason to hoard cash.
>On September 8, 2014, Mortimer D. A. Sackler emailed Jonathan Sackler, stating that there had been “a huge depreciation in [Purdue’s] bottom line and more importantly shareholder value over the past 5+ years” and that Purdue was in a “death spiral.”
And despite what the letter of the law says, I can't imagine wanting to support such a system where once can knowingly poison middle America for decades and run away with profits. At the very least it's incredibly unpatriotic and does more to threaten American hegemony than any quagmire in the middle east. This isn't a case where they were just "diversifying" as good financial advice - they foresaw their litigation issues in 2008. The fact it took more than 10 years to get to the court has more to do with the slowness of our justice system rather than the Sackler's financial savvy.
It's the view that the defense is going to argue and the prosecution will have to disprove.
>It's rare for any corporation to distribute most, if not all, of a companies FCF to shareholders
You can't convict people on "rare" behavior.
>then this kind of shareholder enrichment could be argued to be a gross mismanagement of company funds.
It's a private company. They have wide latitude to do whatever they want.
>And despite what the letter of the law says, I can't imagine wanting to support such a system where once can knowingly poison middle America for decades and run away with profits.
Yeah, the flip side is going after them jack ma style.
>This isn't a case where they were just "diversifying" as good financial advice - they foresaw their litigation issues in 2008. The fact it took more than 10 years to get to the court has more to do with the slowness of our justice system rather than the Sackler's financial savvy.
That does raise an interesting issue. If there's threat of litigation, how much money should you have to keep on hand? That should prevent the issue we saw with perdue. Should companies that are currently being sued be prevented from paying out dividends? What about companies that are being sued all the time, or frivolous lawsuits? What if the lawyers in 2008 claim (or even honestly believe) that the lawsuits have a slim chance of succeeding?
The defense is getting paid millions to carry water for the Shacklers, you don't have to.
>You can't convict people on "rare" behavior.
You absolutely can, what are you talking about? The entire basis of criminal negligence is based on what an reasonable actor would do. I find it hard to believe that a "reasonable" CEO would effectively dial R&D spending to 0. At the very least other shareholders could sue for securities fraud.
>Yeah, the flip side is going after them jack ma style.
I'm not sure your what the problem with this is? I have no problem with the state going after billionaires who act criminally negligent nor do I have any problem with the state going after anyone else who breaks the law. Why would I sacrifice millions of Americans and the potential future of the country for a couple of bad actors. If I take your "China bad" argument at face value, why should America cripple it's own population during the critical moment when it will need to answer to Chinese hegemony? I guess it would be a sick just desserts for China to exercise power over an opiod addicted west.
>Should companies that are currently being sued be prevented from paying out dividends? What about companies that are being sued all the time, or frivolous lawsuits?
You are talking hypotheticals, but the law isn't C++ code. Intent matters, which is why we have judges. It's my belief the prosecution should be able to show that the Sacklers intentionally sabotaged Purdue pharma in an effort to extract as much capital as possible before the federal government and other litigious parties sued Purdue Pharma. That would be fraudulent transfer - they weren't paying themselves massive dividends to "diversify their portfolio", they were doing it to prevent their assets from being frozen. The most vile part about it is the fact they knowingly engaged in what should be a criminal enterprise and got away with it - this is something that simply shouldn't be allowed to happen in future. Again, the economic burden from opiod misuse costs us a cool $80B according to the CDC. That's your tax dollars cleaning up the mess of this criminal enterprise. Those are families destroyed that now have to depend on the welfare state.
Limited liability is not about, and has many asterisks before it applies.
But it isn't clear to me that the owners having criminal liability was the basis the bankruptcy court was operating under ... though it is clear both side thought it was the way things _could_ go, so they preempted that state.
I'm sure there are other dynamics at play but Xi has probably started seeing the same thing in China, hence the recent crackdown on said corporate power.
I'm just talking about slapping down billionaires, cracking down on gambling, making education equal to all kids, etc.
None of it is worth the loss of free speech.
The US is happy to relegate itself to a Russia-like plutocracy as China eats our lunch.
Bonus points if they can target individuals, even the au pair gets to survive these days!
Probably will take the form of looming $20 billion in open interest expiring worthless on options on whether $x pharma exec will be alive by $y date, that trades on a decentralized options exchange that uses a decentralized prediction market amm liquidity pool as a underlying price feed.
But that's not what's happening? At least from my reading of the article, they settled with the state, that's it. The judge wasn't like "you're off the hook because the lawsuits were too complicated".
>The complex bankruptcy plan, confirmed by Drain at a hearing in White Plains, N.Y., was negotiated in a series of intense closed-door mediation sessions over the past two years.
>The deal grants "releases" from liability for harm caused by OxyContin and other opioids to the Sacklers, hundreds of their associates, as well as their remaining empire of companies and trusts.
>In return, they have agreed to pay roughly $4.3 billion, while also forfeiting ownership of Purdue Pharma.
[1] https://www.bloomberg.com/graphics/2020-sackler-family-money...
Individuals injured by the Sacklers are not party to the current case, but are now unable to sue. Or am I misreading?
We're accelerating into a new feudal age. The aristocracy becomes, or is already, unimpeachable.
It worked for the banks in 2008, why wouldn't it work for them?
Sure, you can embroil the company in 1000 lawsuits, but the end result will be lawyers getting all the money.
No, none of the people getting immunity are filing for bankruptcy, which is one of the absolutely ridiculous parts of this settlement. Why should a bankruptcy settlement even apply to them if that's the case?
Bankruptcy court is pretty much always like this, though. I remember the same kinds of things coming up during, e.g., SCO.
all the sackler billions should be clawed back and commensurately redistributed to literally everyone else.
Not even that. They agreed to give 4.3 billion dollars over the next 9 years. Given how much net worth they have, over that 9 years they will earn that much, or more, in interest. They're just giving up the next 9 years of growth, they'll still be multi-billionaires.
There is no acceptable punishment for a crime of this scale that doesn't adequately deter future criminals. Billions in rewards isn't just inadequate, it's disrespectful to every victim and their families.
Well this is just a self-justifying statement. "Acceptable," "adequately," so many ways to weasel out of assigning any consequences. Let's just discuss how adequate a hypothetical punishment will be in the future that we both definitely know facts about.
>Billions in rewards isn't just inadequate, it's disrespectful to every victim and their families.
Disrespectful to remedy the loss of one or more breadwinners? Disrespectful to prevent descendants from firing up the corporate grill again? I don't know what ethical standard you're using, but it seems to elevate suffering and misfortune.
Disgorgement and prison, the facts bear this out. That they were able to buy their way out of this is more evidence that the nation strives to protect criminals who have money and are white.
You're the one that invented that dichotomy, so you'll need to support it with more than speculation as a counterargument or admit it's just that.
The US can afford $4 billion in opioid relief efforts on its own (what's the yearly budget at federal and state level already?) so it's not like we're in a position to beg for scraps here. But really there's no reason why there would be nothing left of their fortune after lawyer fees.
More importantly, this stance makes it ok to make a profit this way. They would come out of this with billions of dollars more than they started with and no threat of ever being legally liable again. They should not have that money.
They set up a pharmaceutical empire with thousands of reps pushing disinformation to doctors and patients, they should absolutely have to deal with thousands of lawsuits come home to roost.
Exactly what I was thinking. Go after the Sacklers, relentlessly, as long as it takes, until they have nothing, and hopefully are in jail. The few billions of dollars coming out of this settlement aren't even a rounding error in the US federal budget, we can afford to just pay it ourselves. I'm happy to do that if it means putting the Sacklers behind bars, bankrupt.
Another option that I’m fond of: send them to jail for a very long time.