Supreme Court Ends OxyContin Settlement

Purdue Pharma, the maker of OxyContin, filed for bankruptcy in 2019 due to thousands of lawsuits over its role in the opioid crisis.

The company planned a $6 billion settlement to address these claims, offering legal protections to its owners, the Sackler family, who had not declared bankruptcy.

However, the Supreme Court's 5-4 ruling, written by Justice Neil Gorsuch, nullified these protections. The court stated that US bankruptcy law does not permit courts to release claims against non-debtors without the plaintiffs' consent.

This decision could have far-reaching effects on similar cases involving companies like 3M and the Boy Scouts of America.

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Signs of Slowdown Continue

Personal spending dropped to an annualized 1.5% in the first quarter. Orders and shipments of business equipment fell in May, along with a decline in pending home sales.

Initial jobless claims dropped slightly, but continuing claims rose to a 2.5-year high, suggesting a weakening job market.

Business investment in equipment also slumped, contributing to a wider trade deficit.

Core capital goods orders fell by 0.6% in May after a small rise in April. Exports also declined, widening the goods trade deficit by 2.7%

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Supreme Court Strips SEC’s Key Tool

The Supreme Court ruled against the SEC's use of administrative law judges in deciding fraud cases. Hedge fund manager George Jarkesy challenged this practice, leading to the court’s decision.

The 6-3 ruling states fraud cases must go through jury trials. This aligns securities fraud with common law fraud which uses juries.

Over 1,900 administrative law judges could see their roles altered. The SEC alone secured $4 billion in penalties through such judges in 2022.

Elon Musk and Mark Cuban argue this decision levels the playing field and increases transparency. Justice Sonia Sotomayor dissented, fearing the ruling might cause "chaos" and limit Congress's power.

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Walgreens' Dark Times

In the latest earnings report, Walgreens revised its profit forecast downwards. The new estimate is $2.80 to $2.95 per share, lower than the previous $3.20 to $3.35.

Walgreens announced it will close many underperforming stores. They have already closed 1,109 stores globally. This news sent shares plummeting by 25%.

CEO Tim Wentworth is driving measures including layoffs and a $1 billion cost-cutting plan. The company also halved its dividend to save cash.

The company will no longer be the majority owner of VillageMD, though it will continue investing.

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