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Sacklers’ Bank Records Can Be Part of State Probes, Judge Says

Sacklers’ Bank Records Can Be Part of State Probes, Judge Says

(Bloomberg) -- Banks used by the billionaire Sackler family, which owns opioid maker Purdue Pharma LP, will face new pressure to turn over financial records after a group of states got permission from a judge to investigate the family’s wealth, the latest twist in the company’s bankruptcy case.

The states have filed lawsuits accusing the Sacklers, who are not in bankruptcy, of helping to trigger the U.S. opioid crisis through Purdue’s aggressive marketing of the OxyContin painkiller. While those suits have been put on hold by the company’s Chapter 11 case, U.S. Bankruptcy Judge Robert Drain in New York on Tuesday said the states can continue investigating financial records of the family, which has been accused of extracting billions from Purdue.

“We are pleased that the court authorized this examination of the Sacklers finances to proceed while the case against Purdue Pharma continues through the bankruptcy process,” New York Attorney General Letitia James, who has led the effort, said in a statement on Wednesday.

Last year, just before Purdue’s Chapter 11 case was filed, one of New York’s earlier subpoenas to a bank used by the Sacklers showed that about $1 billion in profit from the company had been moved overseas. James has said that’s an indication investigators should keep digging to see how much money the family has and where it is being held.

Purdue declined to comment on the ruling. Representatives for the Sacklers didn’t immediately return emails seeking comment.

About 2,700 local and state governments have sued Purdue, alleging it pushed doctors to overprescribe OxyContin and downplayed its highly addictive nature. To end the litigation, the company has proposed a global settlement that it values at $10 billion. The family has vowed to put up at least $3 billion and hand over ownership of Purdue to a trust controlled by local governments and other creditors. While some states have agreed to the proposal, others say it isn’t enough.

New York sent dozens of subpoenas last year to Sackler family members, their money managers and various entities affiliated with Purdue, as well as their banks and financial institutions. The new set of subpoenas won court approval after narrowing the recipients to just the banks and financial institutions, since the Sacklers and Purdue are still protected by the bankruptcy stay on litigation.

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