Shortly, on December 4, 2023, the Sacklers' lawyers will be arguing before the Supremes that a Chapter 11 which purports to allow the family to cut off all liability, in suits against it -- for the opioid crisis it made (over a decade) about $15 billion bilking. . . all while keeping over $6 billion of its family's personal gains from the debacle (via a series of dividends, prior to Chapter 11) is somehow perfectly. . . cricket.
It is not. In fact, despite the very broad powers granted to bankruptcy courts in the US, a mere argument that the Sacklers will never likely willingly settle (in tens of thousands of individual suits), and thus it would be better for all victims to get something soon, rather than nothing. . . decades from now. . . is not remotely part of the tool bag, where the family did not also file bankruptcy, and consent to starting over with just $6,000 each -- as all other humans would be required to do.
As one might surmise, this malign hubris vexes me. And it is fair to say that the greed of selling billions of dollars of both generic and branded opioid drugs to addicted US citizens, while turning a blind eye to the fact that many thousands had no business holding a prescription, at the drugstore counters. . . led to this moment.
In fact, Mallinckrodt has now twice gone into the tank over its opioid liabilities, and has not yet re-emerged. This morning, we learn that in New Jersey, after the DoJ averred that RiteAid willfully turned a blind eye to prescription abuse in its 2,000 some retail outlets. . . it too is entering Chapter 11. The company mostly suggests the New Jersey filing reflects low margins on all products sold in RiteAid outlets -- but it is plain that the company has more than $9 billion in liabilities (even before perhaps $3 to $5 billion in opioid contingent liabilities) -- and only around $6.8 billion in assets. So, yes, this too is an. . . opioid hangover story.
In any event, here's a bit of the MSM (Bloomberg) version of the story:
. . .US pharmacy chain Rite Aid Corp. filed for bankruptcy as it looks to restructure debts, and said it will shutter more stores.
As part of a court-supervised process, Rite Aid received a commitment for $3.45 billion in new financing from certain lenders, it said in a statement, without elaborating. It also said it clinched a restructuring deal with holders of its senior secured notes and also appointed Jeffrey S. Stein as chief executive officer, citing his expertise in turning around companies. . . .
We are hopeful that the Supremes will at least end the abuse by the Sacklers of the bankruptcy laws. We are hopeful that the case is sent back to the bankruptcy courts with an instruction that if the plan is to be approved, another ~$6 billion must be taken from the Sacklers' ledger -- and the family members must each start over, with only $6,000. That is how well each of us ordinary Americans -- would fare, in such a case.
Onward -- with three weeks in a row of theater on tap, as Tuesday night brings a ticket to "The Lehman Trilogy", here. That ticket, bought months ago (with several old, and fellow Fortune 100 life science friends), now seems prescient. . . as well. Grin.
नमस्ते
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