Judge conditionally OK’s settlement

Family would give up control of OxyContin maker under proposed terms, be shielded from future lawsuits.

A federal bankruptcy judge gave conditional approval Wednesday to a sweeping, potentially $10 billion plan submitted by OxyContin maker Purdue Pharma to settle a mountain of lawsuits over its role in the opioid crisis that has killed a half-million Americans over the past two decades.

Under the settlement, the Sackler family will give up ownership of the company and contribute $4.5 billion. But the Sacklers will be shielded from any future lawsuits over opioids.

The drugmaker itself will be reorganized into a new company with a board appointed by public officials and will funnel its profits into government-led efforts to prevent and treat addiction. Also, the settlement sets up a compensation fund that will pay some victims of drugs an expected $3,500 to $48,000 each.

After an all-day hearing in which he analyzed the plan’s pros and cons for a nonstop 6 ½ hours, U.S. Bankruptcy Judge Robert Drain said he would approve it as long as two relatively small changes were made. If so, he said, he will formally enter the decision on Thursday.

He said that while he does not have “fondness for the Sacklers or sympathy for them,” collecting money from them through lawsuits instead of a settlement would be complicated.

The deal comes nearly two years after the Stamford, Connecticut-based company filed for bankruptcy under the weight of some 3,000 lawsuits from states and local governments, individuals, Native American tribes, hospitals, unions and other entities.

They accuse Purdue Pharma of fueling the crisis by aggressively pushing sales of its best-selling prescription painkiller.

Under the settlement, the Sacklers were not given immunity from criminal charges, though there have been no indications they will face any.

State and local governments came to support the plan overwhelmingly, if grudgingly in many cases. But nine states and others had opposed it, largely because of the protections granted to the Sacklers.

The attorneys general of Washington state and Connecticut immediately announced they will appeal the plan, as did the U.S. bankruptcy trustee, which seeks to protect the nation’s bankruptcy system.

The Sacklers “should not be allowed to manipulate bankruptcy laws to evade justice and protect their blood money,” Connecticut Attorney General William Tong said.

Some families who lost loved ones to drugs also came out against the settlement, including Ed Bisch, of New Jersey, whose 18-yearold son died of an overdose nearly 20 years ago. “The Sacklers are buying their immunity,” he said.

But other families said they did not want to risk losing the money that will go toward treatment and prevention.

“If they gave me a million dollars, would it help bring back my son?” said Lynn Wencus, of Wrentham, Massachusetts. “Let’s help the people who are really struggling with this disease.”

Purdue Pharma said in a statement that the settlement would avert “years of value-destructive litigation” and instead ensure that billions will go to help people and communities hurt by the crisis.

The bankruptcy judge, based in White Plains, New York, had urged the holdouts to work out an agreement for the same reason.

“Bitterness over the outcome of this case is completely understandable,” Drain said. “But one also has to look at the process and the issues and risks and rewards and alternatives of continued litigation versus the settlement laid out in the plan.”

Some of opioid deaths over the past two decades have been attributed to OxyContin and other prescription painkillers, but most are from illicit forms of opioids such as heroin and illegally produced fentanyl. Opioid-linked deaths in the U.S. continued at a record pace last year, hitting 70,000.

With the settlement, family members who have owned the company will still be worth billions.

Whether the deal holds the Sacklers sufficiently accountable was the most contentious question through the proceedings. Many state attorneys general and advocacy groups working on behalf of opioid victims pushed for the family members to pay more and initially fought against the liability waiver.

They succeeded in boosting the amount the Sacklers would pay from a likely $3 billion to a guaranteed $4.5 billion over a decade.