The Supreme Court temporarily suspended a multi-billion-dollar bankruptcy agreement involving Purdue Pharma. This arrangement would insulate the company's Sackler family owners from civil lawsuits linked to the opioid epidemic.

Furthermore, the Court announced it would examine a challenge to Purdue's settlement - the producer of the opioid OxyContin - which encompasses all 50 U.S. states and other entities.

The Court's directive seeks briefs addressing whether bankruptcy courts can sanction a Chapter 11 reorganization that discharges claims made by non-debtors against third parties, mainly when claimants do not consent.

The order to pause the settlement was unanimous, with no justices dissenting, CNBC noted. This hold was initiated at the Department of Justice's (DOJ) 's behest.

The DOJ posited that the exemption of the Sacklers from civil responsibility was not only outside the purview of the Bankruptcy Code but also exploited the bankruptcy system and posed significant constitutional dilemmas.

As a condition of the agreement, the Sackler family pledged to contribute $6 billion over the forthcoming two decades. Purdue must also donate funds once it transitions into a new organization committed to addressing the opioid crisis. The case is slated for deliberation in December at the Supreme Court.

Purdue Pharma articulated its confidence in the settlement's legality, hoping the Supreme Court would concur. Yet, the company voiced its discontent regarding the U.S. Trustee's ability to singularly defer the allocation of billions intended for victim reparation, addressing the opioid epidemic, and overdose intervention.

The settlement was finalized in May between Purdue, U.S. states, and many local administrations. As per this arrangement, the Sackler family conceded governance of the Connecticut-based firm. This plan received endorsement from the 2nd U.S. Circuit Court of Appeals in New York in May.