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.