The daily business briefing: May 31, 2023

House committee advances the debt ceiling deal, a court rules Purdue Pharma can shield Sacklers from opioid liability, and more

OxyContin medication bottles
Purdue Pharma introduced the painkiller OxyContin in the 1990s
(Image credit: George Frey/Bloomberg via Getty Images)

1. Debt ceiling deal clears first obstacle

The bipartisan deal to raise the debt ceiling advanced through the House Rules Committee, narrowly passing 7-6 as two Republicans joined Democrats in opposing the bill. Conservative Reps. Chip Roy (R-Texas) and Ralph Norman (R-S.C.) tried to block the legislation, saying House Speaker Kevin McCarthy (R-Calif.) hadn't won enough spending cuts from President Biden during their negotiations, but another conservative, Rep. Thomas Massie (R-Ky.), split with them, setting up a debate and vote in the full House on Wednesday, five days before the June 5 deadline when the Treasury Department says it will run short of money to pay all the federal government's bills. Despite efforts from GOP hardliners to block it, McCarthy said he was confident the bill would pass.

The Hill Politico

2. Court grants Sacklers opioid immunity in exchange for $6 billion payment

A federal appeals court in New York ruled Tuesday that Purdue Pharma can shield its owners — members of the billionaire Sackler family — from lawsuits over the drug maker's role in the opioid crisis in exchange for a $6 billion settlement. The ruling clears the way for a bankruptcy deal that includes the payout. The Sacklers had said a bankruptcy deal would be impossible unless they were released from future liability. Purdue Pharma declared bankruptcy in 2019. The company introduced the painkiller OxyContin in the 1990s, and aggressively promoted it, claiming it was non-addictive. Sales soared, fueling an opioid epidemic that killed more than 564,000 people in overdoses between 1999 and 2020.

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CNN

3. Goldman Sachs to lay off another 250 workers

Goldman Sachs plans to cut a limited number of jobs, probably less than 250, in a new round of layoffs as it cuts costs in response to a slowdown in Wall Street deal-making, multiple news outlets reported Tuesday, citing sources familiar with the matter. Goldman slashed 3,200 positions in the first quarter, its biggest layoff since the 2008 financial crisis. It also cut 500 jobs last year. Investment banks have seen their revenue fall as deals dried up in the face of the Federal Reserve's aggressive interest rate hikes to bring down inflation. The war in Ukraine also hurt business by dimming economic forecasts.

Reuters

4. Stock futures fall as House debt ceiling vote looms

U.S. stock futures fell early Wednesday ahead of the final trading day of May, as investors awaited a vote on the debt ceiling deal in the full House. Futures tied to the Dow Jones Industrial Average were down 0.2% at 6:45 a.m. ET. S&P 500 and Nasdaq futures were down 0.3%. The three main U.S. indexes were mixed on Tuesday before the House Rules Committee narrowly voted to advance the debt deal. The Dow fell 0.2% while the S&P 500 was flat. The tech-heavy Nasdaq rose 0.3% with a boost from Nvidia. The chip maker's shares gained 4.2% on Tuesday, lifting its market cap briefly rise above $1 trillion, thanks to optimism about rising demand for artificial intelligence applications using its advanced microchips.

CNBC The Guardian

5. Disgraced Theranos founder Elizabeth Holmes reports to prison

Elizabeth Holmes, disgraced founder of failed blood testing startup Theranos, reported to a minimum-security federal prison in Bryan, Texas, on Tuesday to start serving her 11-year, three-month fraud sentence. Holmes, 39, was found guilty last year of wire fraud and conspiracy for making false claims that her technology could detect a wide range of illnesses from a few drops of blood. She and former business partner Ramesh Balwani also have been ordered to pay investors $452 million in restitution. Holmes and Balwani were tried separately. He was sentenced to nearly 13 years in prison after being convicted on 12 fraud counts. Both have appealed their cases. Holmes lost a bid to remain free pending a decision on her appeal.

The New York Times

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Harold Maass

Harold Maass is a contributing editor at TheWeek.com. He has been writing for The Week since the 2001 launch of the U.S. print edition. Harold has worked for a variety of news outlets, including The Miami Herald, Fox News, and ABC News. For several years, he wrote a daily round-up of financial news for The Week and Yahoo Finance. He lives in North Carolina with his wife and two sons.