Purdue Pharma bankruptcy plan, which would give Sackler family immunity, moves forward
The company can start soliciting support for its Chapter 11 reorganization plan.
A controversial bankruptcy plan involving OxyContin maker Purdue Pharma, which would protect the Sackler family from litigation related to the opioid crisis, advanced Thursday.
A federal bankruptcy court judge in White Plains, New York, has authorized Purdue to begin soliciting support for his Chapter 11 reorganization plan, which would dissolve the drug company and reinstate it as a public trust. More than 600,000 applicants will now begin receiving ballots regarding the plan.
Purdue filed for Chapter 11 protection in 2019 as it faced thousands of lawsuits across the country for its aggressive marketing of OxyContin and other opioid products.
The company said the reorganization plan would bring more than $ 10 billion in value to communities ravaged by the opioid epidemic and provide millions of doses of opioid addiction treatment and overdose medication.
“The approval of the disclosure statement and the start of the solicitation period is the key next step towards approving Purdue’s historic reorganization plan, which has the potential to improve public health by accelerating resources to communities. and those affected by the opioid crisis, ”Steve Miller, chairman of the board, Purdue, said in a statement. “This is what we have been working towards since filing for bankruptcy in 2019.”
Judge Robert Drain advanced the reorganization plan over objections from two dozen state attorneys general, who accused members of the billionaire Sackler family, some of whom founded and own Purdue, of taking unfair advantage of the bankruptcy. Hundreds of thousands of other stakeholders have shown their support for the plan.
If approved, the reorganization plan would keep members of the Sackler family, who have claimed to have acted legally and ethically, immune from opioid-related lawsuits. In return, as part of the plan, the Sackler family has agreed to pay $ 4.275 billion in personal cash over nine years for the settlement of the opioid lawsuits and has no involvement in the new company.
Massachusetts Attorney General Maura Healey said in a recent interview with NPR it would “set a terrible precedent”.
“The bankruptcy system should not be allowed to protect non-bankrupt billionaires,” she said.
Supporters of the reorganization plan argued that it was the best chance for opioid sufferers to receive the money.
In a statement Thursday, Purdue boasted that “the plan would transfer billions of dollars of value into trusts for the benefit of the American people,” although a disclosure statement filed by Purdue in bankruptcy court on Thursday shows that the full amount in dollars exceeds $ 1.3 billion. the next five years.
The reorganization plan also includes the creation of an online repository for more than 13 million documents – a public release of evidence unseen since the 1998 Tobacco Regulations. However, the plan stipulated that the documents should not “reveal the names or email addresses of individual or former employees” of Purdue.
The redactions would cover up the identity of those who led Purdue to twice plead guilty to federal charges, most recently in November.
A final confirmation hearing for the plan is scheduled for August 9.