Purdue offer not enough for Tong

STAMFORD — Connecticut Attorney General William Tong reiterated Tuesday his opposition to now-bankrupt Purdue Pharma’s settlement offer, asserting that the Sackler family members who own the company need to hike their proposed payout and questioning how the potential deal would restructure and value the OxyContin maker.

Tong represents one of 25 state attorneys general who have expressed concerns about Purdue’s plan for settling the lawsuits filed against the company that was outlined Sunday in a Chapter 11 filing. While lawyers for about 2,000 cities and counties and another two-dozen state attorneys general have expressed support for the settlement framework — which the company values at more than $10 billion — Tong’s position highlights the significant misgivings that would need to be addressed to finalize an agreement through bankruptcy court.

“The Sacklers have offered $3 billion on the table, and that’s not enough,” Tong said in an interview Tuesday. “Not only is it not enough, it’s a slap in the face . ... Beyond the $3 billion, we don’t have any confidence in the value of what they’re offering.”

A Purdue spokeswoman declined to comment Tuesday on Tong’s position. The company’s settlement plan does not acknowledge any wrongdoing, and the firm has denied the allegations of deceptive OxyContin marketing made by Tong, other state attorneys general and other plaintiffs’ lawyers.

The Sacklers’ prospective cash payout of at least $3 billion represents a cornerstone of Purdue’s proposal. The sale of their international pharmaceutical businesses, namely the United Kingdombased Mundipharma, could generate additional billions, but estimates vary about those assets’ value.

Tong argues the Sacklers — whose family net worth has been estimated at $13 billion — can afford to contribute a much higher amount. He has also accused the Sacklers of siphoning billions out of Purdue in recent years.

In addition, he argues more funds are needed to help tackle a crisis that has resulted in more than 5,000 opioid-involved deaths in the past seven years in Connecticut.

“The total damage they’ve done over the entire period, where they engaged in dishonest sales and marketing practices and basically lied to the American people about the risks of opioids … is an exponent of $3 billion,” Tong said.

He declined to give a specific number for how much he thinks the Sacklers should pay.

Purdue’s proposed terms also call for the restructuring of its business into a trust or similar entity that would be known as NewCo. The successor firm could contribute, for free or at low cost, tens of millions of doses of opioid overdose reversal medications to cities and states, according to the company’s plan.

“They’re valuing these drugs at billions upon billions of dollars,” Tong said. “I don’t have any basis right now to believe that they’re worth that much.”

Tong said he also needs assurances that Purdue would not be turned into another for-profit business.

“As a lawyer, I need to be sure about what they’re talking about,” he said. “And when they talk about a liquidating trust or public-benefit trust, I don’t know what they’re talking about because those are not specific terms.”

Tong’s office sent several senior staff members to attend the first of the company’s bankruptcy hearings in in federal court in White Plains, N.Y., on Tuesday.

Amid the bankruptcy proceedings, Tong wants the state to keep pursuing in state Superior Court its claims against the Sacklers as individuals.

“That doesn’t mean that is what will happen; that is what I think should happen,” Tong said.

Tong