Hearings begin to finalize Purdue Pharma $7.4 billion bankruptcy settlement plan
Purdue Pharma begins several days of hearings Wednesday to finalize a $7.4 billion bankruptcy restricting plan that no longer fully protects the company’s owners, members of the Sackler families, from opioid litigation.
The U.S. Supreme Court last year blocked an earlier version of Purdue’s bankruptcy settlement because it gave the Sacklers immunity from lawsuits over the misleading marketing of OxyContin, the painkiller that Purdue began marketing in 1996.
Purdue filed for bankruptcy in 2019 after thousands of cities, states, territories and individuals sued, alleging that the company and its owners fueled waves of addiction and overdose deaths.
Under the new plan, the Sacklers and Purdue boost their settlement contribution to $7.4 billion. The revised agreement settles all civil claims against Purdue, but individual creditors can choose to litigate claims against the Sacklers, who have long argued that although they regret their company’s role in the nation’s opioid epidemic, they are not directly or personally responsible for it.
Purdue said the new plan received support from more than 99% of voting creditors.
“The high level of support for this Plan is gratifying after years of intense work with our creditors to craft a settlement that maximizes value for victims and communities and puts billions of dollars to work for the public good,” Purdue Chairman Steve Miller said in a statement last month. “Following the outcome of this vote, we are focused on preparing for the confirmation hearing and ultimately the emergence of a new company with a public-minded mission.”
In addition to paying billions to creditors, the plan "will generate substantial further value" by creating a new company, Knoa Pharma, that "will provide millions of doses of lifesaving opioid use disorder treatments and overdose reversal medicines at no profit," according to the Purdue statement.
