Why did Purdue Pharma file for bankruptcy in Westchester County?

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After agreeing to settle some 2,600 separate lawsuits over the company’s involvement in promoting the country’s opioid crisis, the Stamford-based company Purdue Pharma filed for bankruptcy this week – in Westchester, of all places.

The basic points of the settlement have been widely publicized since its announcement on September 16: The Sackler family, owners of Purdue, will relinquish control of the company and contribute all of its assets to a form of trust which will then operate with all profits. will benefit individual plaintiffs in their respective cases and the American population as a whole.

The company will devote considerable funds to the marketing of restrictions on the promotion or sale of opiates and the treatment of drug addiction. All of this, estimated at $10 billion, will be in addition to a minimum of $3 billion coming directly from the Sackler family.

However, the experts were surprised by the location of the deposit: the United States Bankruptcy Court for the Southern District of New York in White Plains. It’s here that the maker of OxyContin asked a US bankruptcy judge to temporarily halt the more than 2,600 lawsuits against the Stamford company for 270 days while the details of the settlement are worked out, to allow $34 million in bonuses to employees who met “target performance goals,” and to protect the Sackler family fortune from further litigation. (According to CNN$26 million was authorized for payment to employees, and the Sacklers were unprotected.)

Westchester has unfortunately not been spared from the national opioid crisis. According to a survey conducted by Westchester magazine this year alone, 63% of residents have or know someone who has been dependent on opioids. Only 21% of respondents thought the county had sufficient support systems, with less than one in four people able and willing to recommend helpful experts or treatment facilities. The City of YonkersNew York County and State are all among the municipalities currently suing Purdue, the Sacklers and various other pharmaceutical manufacturers.


Read more: Westchester has an opioid problem – what do we do now?


Still, that doesn’t explain why a Connecticut-based company that has been trading primarily from Chicago for several months would file for bankruptcy in White Plains.

“You can usually file [in a district] if you have a place of business there,” says Lawrence R. Reich, Westchester Top Lawyer and bankruptcy expert at Reich Reich and Reich in the White Plains. Or, he says, “You can file where your major assets have been for the last 180 days.”

This would have made the most likely locations for filing Fairfield County’s Bridgeport Courthouses or Manhattan’s Bowling Green Courthouses. However, Manhattan and White Plains are both part of the Southern District of the Federal Bankruptcy Court of New York. To find out why Purdue would have filed locally, we turned to another of Westchester’s top lawyers, Judith Elkin.

“The only good thing about filing in Westchester is you know exactly which judge you’re getting,” she says, “and that’s Judge Drain.”

While the District of Connecticut and the Southern District of New York are both Second Circuit courts, Manhattan courts currently boast seven different judges – eight if you plan to visit Judge Robert E. Grossman – and Connecticut only Chief Justice Julie A. Manningwho has been a Connecticut bankruptcy judge since 2013 and chief justice since 2014.

White Plains’ Judge Robert. D. Drainmeanwhile, has served since 2002, presiding over numerous high-profile bankruptcies, including a few pretty notable people even laymen would recognize the names – A&P and Sears, anyone?

“He’s a very shrewd judge,” Reich said.


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Purdue Pharma provided a helpful press release and note when contacted by Westchester magazine, but had no comment on the choice of filing location at press time. As to why the company would choose the longtime, high-profile Judge Drain, Elkin was more willing to speculate.

“There’s a bit of comfort in who you get.”

Reich adds that while there’s no way to know for sure, the possibility of buying judges is “not very unlikely.”

“They could find themselves faced with a motion to change venues,” he says. “It’s not a question of jurisdiction – there is national jurisdiction in the Banking Court – but the place, or where it is heard, can be changed at the discretion of the court.”


Read more: Latimer announces new wellness initiative to tackle Westchester’s opioid epidemic


Even if they get Judge Drain for their bankruptcy proceedings, Purdue Pharma and the Sackler family might still have something to worry about. attorneys general of over twenty US states and territories have openly opposed the proposed settlement, including in both Connecticut and New York.

“It should come as no shock that Purdue’s bankruptcy filing comes just 48 hours after my office disclosed approximately $1 billion in wire transfers involving Swiss bank accounts,” said New York Attorney General Letitia. James.

‘Any deal that deprives Americans of billions of dollars, allows the Sacklers to escape accountability, and allows this family to continue selling their drugs to the world is wrong,’ she says, vowing to continue the New York lawsuit .




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