Ruling clears way for Purdue Pharma to settle opioid claims, protect Sacklers from lawsuits

A federal appeals court cleared the way for the maker of OxyContin to settle thousands of legal claims tied to the opioid epidemic while shielding the wealthy owners of Purdue Pharma, the Sackler family, from future lawsuits.

Under the plan approved Tuesday by the 2nd U.S. Circuit Court of Appeals in New York, members of the wealthy Sackler family would give up ownership of Stamford, Connecticut-based Purdue,

which would become a new company known as Knoa, with its profits being sent to a fund to prevent and treat addiction.

Family members would also contribute $5.5 billion to $6 billion in cash over time, or around half of what the court found to be their collective fortune, much of it held offshore. A chunk of that money — at least $750 million — is to go to individual victims of the opioid crisis and their survivors. Payments are expected to range from about $3,500 to $48,000.

Tuesday’s decision also protects members of the

Sackler family from lawsuits over the toll of opioids, even though they did not file for bankruptcy.

The court’s ruling reversed a 2021 ruling that found bankruptcy court judges did not have the authority to approve a settlement that would offer bankruptcy protections for those who have not filed for bankruptcy.

Those protections are at the heart of the proposed deal that would end claims filed by thousands of state, local and Native American tribal governments and other entities. Sackler family members have been clear that without the protections, they won’t hold up their part of the deal.

“It’s a great day for victims, some of who desperately need the money and have been waiting for this day for a long time,” said Ed Neiger, a lawyer representing individual victims.

Cheryl Juaire, a Massachusetts woman who lost two sons to overdoses, said she does not know what size payment to expect. “My children are gone and there’s nothing I can do to bring them back,” she said.