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STORY: A multi-billion dollar bankruptcy settlement between OxyContin maker, Purdue Pharma, and plaintiffs who were harmed by America’s deadly opioid epidemic has been put on hold by the U.S. Supreme Court... after the justices agreed to hear a challenge by the administration of President Joe Biden over the legality of the deal.

The decision marks a new twist in the yearslong legal battle over compensation for victims of the opioid crisis.

The Justices said they will now hold oral arguments in December, leaving payments designated for states, hospitals and opioid victims in limbo.

"The main thing that they're reviewing is the legality of legal protections that would stop opioid lawsuits against the members of the Sackler family that owned Purdue Pharma.”

U.S. Bankruptcy Reporter Dietrich Knauth:

"So the purpose of bankruptcy law is to protect debtors who are overwhelmed and who need a fresh start. In many ways, the Sacklers are not bankrupt. They're not entitled to this kind of legal protection. So they've sort of engineered a deal where they're going to get that legal protection in exchange for a monetary payment. And from the Department of Justice, his point of view and I say the Department of Justice in this context, I mean, the office of the U.S. Trustee, which is the DOJ's bankruptcy watchdog, they don't think it's appropriate that you can buy legal protections that you're not entitled to under a U.S. bankruptcy law."

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"And to to be fair to the office of the U.S. Trustee, they have fought this issue in small cases as well."

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"They succeeded on an appeal over the same issue in Ann Taylor's bankruptcy. But because it wasn't the Sacklers and opioid crisis and billions and billions of dollars, that one didn't get as much attention."

Many other stakeholders have responded in opposition to the administration's request to halt the settlement.

A group comprising more than 60,000 people who have filed personal injury claims stemming from their exposure to Purdue opioid products told the Supreme Court they support the settlement, including legal immunity for members of the Sackler family.

"It's potentially a lot worse for the Sacklers than it is for the company. The company is bankrupt, so it will be immunized from lawsuits as a result of pretty normal bankruptcy stuff... (flash) For the Sacklers - their contribution to the bankruptcy plan is premised on them getting legal immunity because they're not bankrupt.

(flash) And a big piece of that is the Sacklers’ willingness to contribute billions of dollars towards opioid abatement efforts. (flash) So whether they'd be willing to kick in billions of dollars without the kinds of legal protections that are in the current deal, it remains to be seen. They've said all along that ending the lawsuits is their priority and that is what they bargained for in exchange for the current deal, which would give five and a half to $6 billion of their money back towards the settlement package that Purdue has negotiated with all of the stakeholders.”

In a statement, Purdue said it was disappointed that the U.S. Trustee, the Justice Department's bankruptcy watchdog that filed the challenge at the Supreme Court, has been able to "single-handedly delay billions of dollars in value that should be put to use for victim compensation, opioid crisis abatement for communities across the country and overdose rescue medicines."

In a court filing, the administration told the Supreme Court that Purdue's settlement is an abuse of bankruptcy protections meant for debtors in "financial distress," not people like the Sacklers.