The Atlanta Journal-Constitution
Bankruptcy filing just a step in huge settlement
Purdue Pharma filed for bankruptcy in the first step in a complex, multibillion-dollar plan by the maker of OxyContin to settle thousands of lawsuits brought against it by state and local governments over the nation’s deadly opioid disaster.
The company and members of the Sackler family, which owns it, expressed sympathy but not responsibility.
“Like families across America, we have deep compassion for the victims of the opioid crisis,” family members said in a statement, calling the settlement plan a “historic step towards providing critical resources that address a tragic public health situation.”
But the bankruptcy filing, made late Sunday, may not get either the drugmaker or the Sacklers off the legal hook.
What’s happening
About half the states and lawyers representing at least 1,000 local governments have agreed to the tentative settlement, which the company says could be worth $10 billion to $12 billion over time and would include at least $3 billion from the Sacklers.
Under the settlement, the family would give up control of the company, and Purdue Pharma would be transformed into a sort of hybrid between a corporation and a charity. It would continue to sell opioids but its profits would be devoted to cleaning up the opioid mess and reimbursing state and local governments for the cost of the crisis that has killed more than 400,000 Americans in the past two decades.
Why it matters
A number of the other states that are holding out have made it clear that they intend to object to the deal in bankruptcy court and seek to continue their lawsuits against members of the Sackler family.
In all, the company is facing 2,600 lawsuits, mostly from local governments.
It will be up to federal bankruptcy Judge Robert Drain in White Plains, New York, to decide whether to approve the settlement, and whether those state lawsuits can continue. A court hearing on the bankruptcy plan is expected today.
For Purdue and the Sacklers, the effort revolves around getting more states to agree to the settlement, which could make approval more likely.
The Sacklers were listed by Forbes magazine in 2016 as one of the 20 wealthiest families in the U.S. In a court filing last week, the New York attorney general’s office contended that the family had transferred $1 billion to itself through Swiss bank accounts and other means.
What’s next
One likely result of the company’s filing is that it will be removed from the first federal trial over the toll of opioids, scheduled to start Oct. 21 in Cleveland.