Ella Epstein, ‘The Need for Dignitary Justice for Tort Creditors in Chapter 11 Bankruptcy’

ABSTRACT
The recent bankruptcies of Johnson & Johnson, the Boy Scouts of America, and Purdue Pharma have thrust the tight-knit world of Chapter 11 bankruptcy practice under the spotlight of public scrutiny. The Purdue case in particular sparked outrage and accusations that the Chapter 11 system serves the rich by keeping them insulated from liability and paying off victims of corporate malfeasance. During the summer of 2021, protesters gathered outside of Judge Robert D Drain’s courthouse, where he was presiding over the Purdue bankruptcy proceedings. Opioid activists unfurled banners decrying Judge Drain’s ‘morally bankrupt bankruptcy court’ and depicting the judge winking merrily over a pile of blood-soaked cash; nearby, an eerie cartoon of a red-eyed Judge Drain loomed over the scene, accompanied by the text ‘the devil’s judge’ and ‘iron curtain of the Sackler massacre’. The activists claimed that Purdue ‘handpicked’ a judge known to be ‘sympathetic’ to them. Perhaps Senator Blumenthal’s statement at a press conference introducing the proposed Stop Shielding Assets from Corporate Known Liability by Eliminating Non-Debtor Releases Act (SACKLER Act) best summarizes this sentiment: ‘Current bankruptcy law is unjust and unacceptable. Bankruptcy should not be a safe harbor from accountability, but that’s how the law works now’ …

Epstein, Ella, The Need for Dignitary Justice for Tort Creditors in Chapter 11 Bankruptcy (February 20, 2022). Columbia Business Law Review, forthcoming.

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