Judge Tells Sackler to Stop Blocking Sale of Greenwich Mansion

A federal bankruptcy judge on Wednesday ordered Richard Sackler and his wife, Lin Gao, to stop interfering with the sale of their Greenwich, Connecticut estate, which the couple pledged as collateral for Purdue Pharma's $7.4 billion opioid settlement. Judge Sean Lane, sitting in White Plains, New York, rejected both of the couple's requests at a hearing: to reconsider his earlier ruling that the property belongs to the settlement pool, and to pause any sale while they appeal.

The ruling is the sharpest courtroom moment yet in a bankruptcy that has spent years converting a family's private fortune into payments for the states, counties and individuals that sued Purdue over its marketing of OxyContin.

What the judge decided, and what he did not

Lane had already ruled that the residence at 60 Field Point Circle was among the assets Sackler family members pledged to fund the settlement. Wednesday's hearing was about whether he would revisit that conclusion. He would not, and he declined to freeze a sale.

He also did not order the couple out of the house. The judge said he was open to that step or to other sanctions, and he noted from the bench that Richard Sackler owns four other homes, including a primary residence in Florida.

Court documents do not estimate the property's market value. The house was sold internally from one Sackler trust to another in order to free up funds for a $62 million settlement payment, according to Reuters, which first reported the ruling.

"This is not a victimless crime"

Lane's language from the bench was unusually direct for a bankruptcy calendar, and it is the part of the hearing that will travel.

"This is not a victimless crime your clients are perpetrating," the judge told Stephan Hornung, a lawyer for the couple. "I am profoundly concerned about the victims of the opioid epidemic having to wait for what's their due in terms of getting payment, by virtue of this."

He returned to the same theme a moment later, rejecting the framing the couple's filings had used. "The persistent fiction that seems to pervade these papers is that this is Dr. Sackler's house and Lin Gao's house. It is not," Lane said.

Julia Winters, representing the Sackler family trust responsible for selling assets, told the court that Lin Gao and her children were still living in the house, which she said complicated efforts to sell the property and the artwork inside it. Hornung said the couple plans to appeal the earlier ruling on the sale.

Where the money goes, and why a house matters

The Sackler family members who owned Purdue until the end of its bankruptcy are funding most of the company's settlement. Most of the money will be paid to state and local governments, resolving tens of thousands of lawsuits over Purdue's marketing of OxyContin and its role in the opioid epidemic.

That is the mechanical reason a single residential property keeps returning to a federal courtroom: the estate is collateral for money owed to opioid claimants, and Lane's stated concern from the bench was that continued litigation over it delays payment to the people the settlement is meant to compensate. Oklahoma, for instance, has already begun routing its Purdue share into treatment infrastructure in Tulsa, and states across the country have been allocating Purdue money on the assumption that the settlement schedule holds.

Richard Sackler, 81, was Purdue's president and chairman during the period when the company marketed OxyContin most aggressively. Purdue pleaded guilty twice to deceptive marketing of the drug. No member of the Sackler family has been charged with any misconduct.

The case is Purdue Pharma, U.S. Bankruptcy Court for the Southern District of New York, No. 19-23649.

The settlement's long tail

For people outside the litigation, the practical effect of the Purdue bankruptcy is measured in what the money buys: naloxone, medication treatment, recovery housing, and the abatement programs that counties have built on projected payouts. Enforcement of collateral pledges like the Greenwich house is what keeps that funding stream from stalling.

People looking for treatment can search medication-assisted treatment programs and opioid addiction care regardless of where the settlement money currently sits.