New Haven Register (New Haven, CT)
Judge: Resolve differences with Purdue
Conn., other states urged to find way to reach settlement with maker of Oxycontin
STAMFORD — The judge overseeing OxyContin-maker Purdue Pharma’s bankruptcy called Friday on Connecticut and the other states that oppose the company’s settlement plan to resolve their disputes with the company’s owners as he prepares to rule next week on the proposal.
Judge Robert Drain made the recommendation near the end of a confirmation hearing that started Aug. 12 to examine Stamford-based Purdue’s plan, a framework valued by the company at more than $10 billion that would settle several thousand lawsuits alleging the firm fueled the opioid crisis with deceptive OxyContin marketing.
Connecticut, California, Delaware, Maryland, Oregon, Rhode Island, Vermont, Washington, West Virginia and the District of Columbia still oppose the proposal.
“It would also be, I think, a real service to millions, if not tens of millions, of people if the objecting states or some subset of them were able to resolve their differences with the Sacklers” who own Purdue, Drain said Friday during the remotely held hearing. “One benefit of a lengthy hearing like this is that the evidence does come out to a great extent. There will be a ruling on this that goes through the evidence that makes it hard for either side just to take rhetorical positions in the future.”
Drain said that he intends to rule Wednesday on the settlement plan. During the hearing, he heard six days of witness testimony and three days of oral arguments from parties supporting and opposing the proposal.
“A ruling also makes it very hard to settle thereafter,” Drain said. “So the parties are basically left
“Connecticut is preparing a notice of appeal (of the ruling) in the event it is necessary. Whatever the decision is next week, it is clear that federal bankruptcy reforms are sorely needed to close the non-debtor release loophole and ensure wealthy bad actors like the Sacklers cannot misuse our bankruptcy courts to evade justice and accountability.” Connecticut Attorney General William Tong
with a choice of resolving their differences now or taking the time primarily, but also spending the money, to fight thereafter — one way or another, either on appeal or in connection with some other form of bankruptcy process.”
Arguably the most controversial component of Purdue’s settlement offer is a stipulation for the Sackler family members who own the company to be released from the pending lawsuits, as well as potential claims related to Purdue. The plan also seeks releases for more than 1,000 other parties associated with Purdue and its owners, including Sackler family members not directly involved with the company.
The potential releases are a condition of the Sacklers’ offer to contribute about $4.3 billion in cash to the settlement. The Sacklers have not personally filed for bankruptcy.
“Connecticut is preparing a notice of appeal (of the ruling) in the event it is necessary,” Connecticut Attorney General William Tong said in a statement Friday. “Whatever the decision is next week, it is clear that federal bankruptcy reforms are sorely needed to close the non-debtor release loophole and ensure wealthy bad actors like the Sacklers cannot misuse our bankruptcy courts to evade justice and accountability.”
In response to an inquiry from Hearst Connecticut Media about the company’s response to Drain’s comments, a Purdue spokesperson referred Hearst to Sackler representatives. A spokesperson for late Purdue co-founder Mortimer Sackler’s side of the family declined to comment, while a message for late cofounder Raymond Sackler’s side of the family was not immediately returned.
Among other key terms, Purdue’s settlement proposal calls for the Sacklers to relinquish control of the company and for the firm to be converted into a “public benefit company” focused on using its funds to tackle the opioid crisis. The Sacklers have also agreed to sell their international pharmaceutical businesses.
In December 2018, Connecticut sued Purdue and eight of the Sacklers. Among its allegations, the complaint asserts that the Sacklers “were directly involved in developing and approved Purdue’s deceptive and illegal activities in Connecticut, and they each participated in the decisions to mislead Connecticut prescribers and patients to generate a huge financial windfall for themselves.”
Despite their proposed contribution to the settlement plan, the Sacklers who own Purdue have denied any personal wrongdoing related to the company.