State suit against Purdue paused

STAMFORD — Connecticut has confirmed that it is voluntarily abiding by an injunction on the lawsuits against bankrupt OxyContin maker Purdue Pharma until April 8, in exchange for the state maintaining access to financial records of the company’s owners.

The state and 23 others that have not agreed to settlement terms with Purdue had gained permission last month from the judge overseeing the bankruptcy to initially limit the stay on their cases to six weeks. Now, having obtained a trove of financial information — including a report outlining multibilliondollar company transfers that benefited the Sackler family members who own it — those “nonconsenting” states will continue to halt their litigation.

“Connecticut remains committed to making the Sacklers pay for the abatement of the health crisis they caused,” Connecticut Attorney General William Tong said in a statement. “Getting access to Sackler financial documents is key to this effort. We have voluntarily and cautiously agreed to abide by the bankruptcy court's injunction in return for the access we need, and we will continue to evaluate the completeness of the Sacklers’ disclosure and the injunction.”

On Oct. 11 Judge Robert Drain had approved an initial stay on the cases until Nov. 6, another move aimed at helping to advance settlement negotiations.

His ruling responded to Purdue’s and the Sacklers’ proposal to halt for six months the approximately 2,700 pending lawsuits, which allege the company fueled the opioid crisis with deceptive OxyContin marketing.

Purdue and its attorneys have argued that a pause to the litigation is needed to preserve the company’s value for a settlement. In its initial bankruptcy filings, Purdue predicted it would spend roughly $263 million this year on legal and related professional costs, comprising its “largest operating expense by far.”

The company values its settlement offer at more than $10 billion, including a prospective cash payout of at least $3 billion by the Sacklers and the sale of their international pharmaceutical businesses.

Its plan would also see the Sacklers relinquish control of the company so it could be restructured into a public trust or similar entity. The successor firm would contribute, for free or at low cost, tens of millions of doses of opioid overdosereversal medications to cities and states.

“We believe that the stay of litigation will provide the most productive environment to advance the proposed settlement structure, aimed at delivering more than $10 billion in value to address the opioid crisis and save lives,” Purdue said in a statement Monday. “We are pleased with the important progress made to date and we look forward to continued collaborative discussions with all parties focused on building further support for the settlement.”

In the meantime, Purdue has agreed to put $200 million into an “emergency fund” for efforts to tackle the opioid crisis.

A message left for a spokesperson for the Sacklers who own Purdue was not immediately returned.

Tong argues that the Sacklers — whose family net worth has been estimated at $13 billion — can afford to contribute a much higher amount and also need to provide more because of their alleged culpability for exacerbating the opioid crisis.

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

“There are 100 things wrong (with the offer), principal among them is that this does not do enough to pay for the harm that they have caused and for which they are responsible,” Tong said in an interview last week.