More US states reach deal in OxyContin maker Purdue’s bankruptcy | Bankruptcy News
If approved by the court, the bankruptcy plan would include statutory discharges protecting the wealthy owners of Purdue Pharma LP, the Sackler family, from future litigation.
Fifteen other U.S. states have reached a deal with Purdue Pharma LP and members of its wealthy Sackler family that took the maker of OxyContin one step closer to resolving a widespread opioid litigation and exiting bankruptcy protection.
With the exception of a handful of states across the country, all now support Purdue’s bankruptcy plan, with the latest deal emerging after weeks of mediation.
The deal, described in bankruptcy court documents filed Wednesday night, was reached after members of the Sackler family agreed to contribute an additional $ 50 million to a proposed litigation settlement and release tens of millions of dollars. additional internal documents for public inspection.
Another 175 million dollars would come from the abandonment of control of family charitable institutions. Members of the Sackler family have also agreed to a ban on naming rights associated with charitable contributions until the dispute settlement funds are fully paid, the documents said.
In total, Sackler’s contributions to Purdue’s exit plan from bankruptcy now total around $ 4.5 billion.
The plan aims to resolve some 3,000 lawsuits filed by U.S. communities alleging that Purdue and its family owners contributed to an opioid crisis that has claimed the lives of about 500,000 people since 1999, according to the Centers for Disease Control and Prevention. United States.
The Stamford, Connecticut-based company and members of its family have denied the claims in the lawsuit.
Purdue said the latest deal hinged on backing other creditors in the company’s bankruptcy process and that he hoped to achieve further consensus on his plan to move billions of dollars of value into trusts for dealing with the opioid crisis in the United States.
Members of the Sackler family called the agreement “an important step towards providing substantial resources to people and communities in need.”
The deal, backed by long-time holdouts including Massachusetts and New York, sets the stage for Purdue to gain court approval in the coming weeks for its bankruptcy plan, which the company estimates at more than 10 billions of dollars. This value depends, in part, on future donations of overdose medication and addiction treatment that the company has under development.
The plan would dissolve the company and transfer the assets to trusts managed on behalf of the plaintiffs who alleged that the company and its owners aggressively marketed the painkiller OxyContin while minimizing its risks of abuse and overdose.
“Although I know this resolution does not bring back loved ones or fix the evil of what the Sacklers did, forcing them to reveal their secrets by providing all the documents, forcing them to pay back billions, forcing the Sacklers quit the opioid business, and shutting down Purdue will help prevent something like this from happening again, ”said Massachusetts Attorney General Maura Healey, the first attorney general to prosecute members of the Sackler family, in a statement.
If approved by the court, the bankruptcy plan would include legal discharges protecting the Sacklers from future litigation. A bankruptcy judge has stayed the lawsuits against the company and the Sacklers after Purdue filed for Chapter 11 bankruptcy court protection in 2019.
“It is heartbreaking that the Sackler family have never declared bankruptcy but have always enjoyed the same bankruptcy protections as their business,” New York Attorney General Letitia James told a conference on Thursday. press with Healey and Minnesota Attorney General Keith Ellison.
“There is no perfect solution here,” added James. “But we cannot let the perfect be the enemy of the good. This deal removes one of the country’s most dangerous drug traffickers from the opioid trade. “
Healey, who said he spoke to opioid victims earlier Thursday, called for reform of aspects of the U.S. legal system that allowed the Sacklers to seek redress in federal bankruptcy court. But she welcomed the additional transcripts of depositions, emails and other evidence that will end up “being online forever, searchable and free to the public.”
In November, Purdue pleaded guilty separately to three crimes related to its marketing of prescription opioid pain relievers, in a separate settlement eclipsing $ 8 billion to resolve criminal and civil investigations by the U.S. Department of Justice.
Members of the Sackler family have not been criminally charged. They had previously agreed to pay $ 225 million to resolve separate civil allegations with the Justice Department. Family members have denied the allegations.