Purdue Pharma deal approved by 95 percent of creditors

CT still opposed, Tong says

STAMFORD — OxyContin maker Purdue Pharma’s settlement plan has gained the support of about 95 percent of voting creditors in its bankruptcy, according to preliminary results released this week — but Connecticut still opposes the proposal.

Among approximately 120,000 creditor votes, 97 percent of nearly 4,800 local and state government creditors voted to “confirm” Stamford-based Purdue’s plan. Other creditor groups accepted at rates between 88 percent and 100 percent. About 40 state attorneys general now back Purdue’s proposal after 15 who had formerly opposed it announced earlier this month that they would sign on following additional concessions made by the company and its owners.

“This is an unprecedented expression of support for a restructuring of this size and complexity in favor of a plan that will provide needed resources to those affected by the opioid crisis,” Purdue Chairman Steve Miller said in a statement. “The preliminary voting results demonstrate a broad consensus among every organized creditor group in these proceedings, and we will continue to work for even greater consensus ahead of the confirmation hearings.”

Purdue expects to make public the final voting results by Aug. 2, but said it does not expect the tally to change “materially” from the preliminary numbers. The votes were calculated by PrimeClerk, Purdue’s courtauthorized “solicitation and balloting agent.”

Also known as a plan of reorganization, Purdue’s settlement plan is not a done deal. It will next face a review by Judge Robert Drain during an Aug. 9 confirmation hearing.

Purdue values its proposal at more than $10 billion. It would resolve several thousand local and state governments’ lawsuits alleging that the firm fueled the opioid crisis with deceptive OxyContin marketing. Despite its settlement offer, the company denies those complaints’ accusations.

Connecticut Attorney General William Tong still vehemently opposes the plan. Connecticut joined California, Delaware, Maryland, New Hampshire, Oregon, Rhode Island, Washington and the District of Columbia in voting against Purdue’s proposal.

Those states’ attorneys general have said that Purdue’s proposed settlement amount is too low. They also oppose the prospective release of the Sackler family members who own the company from pending and potential claims. In addition, they have expressed concerns about a possible conflict of interest related to the company’s plan to convert itself into a “public benefit” company focused on using its funds to tackle the opioid crisis. They have instead called for Purdue’s assets to be sold to private buyers.

“This vote does not change the fact that this deal is insufficient and inadequate and not good for Connecticut,” Tong said in a statement Tuesday. “We will not consent to a plan that seeks to strong-arm us into releasing our claims against the Sacklers and allowing them to walk away with their wealth intact while victims of the opioid epidemic and their families suffer and grieve. I remain firmly opposed and will continue to fight until all viable options are exhausted.”

Tong has not ruled out eventually reaching an agreement with Purdue, but he has frequently criticized the company’s negotiating strategy.

“I haven’t seen a willingness on their part to do anything meaningful,” Tong said at a news conference Monday at the state Capitol. “When I see that, they can give me a call.”

In a landmark deal separate from the Purdue bankruptcy, Connecticut agreed last week to join a $26 billion national settlement with pharmaceutical distributing giants AmeriSourceBergen, Cardinal Health and McKesson and drugmaker Johnson & Johnson — a pact that would resolve local and state governments’ claims that those companies’ operations worsened the opioid crisis.

Connecticut expects to receive about $300 million from the settlement with those four companies, with the funds to be solely focused on the opioid epidemic. Last year, 1,273 people in Connecticut died from opioid-involved overdoses, up 13 percent from 2019.

“There will never be enough money and never enough justice for victims,” Tong said at the press conference. “But $26 billion represents a real investment in fighting the opioid and addiction crisis. It is an acknowledgment by those four companies of their responsibility to do something really meaningful.”