Purdue Pharma begins several days of hearings Wednesday to finalize a $7.4 billion bankruptcy restraint plan that no longer fully shields the company’s owners, members of the Sackler families, from opioid litigation.
Last year, the U.S. Supreme Court blocked an earlier version of Purdue’s bankruptcy settlement because it gave the Sacklers immunity from lawsuits over deceptive marketing of OxyContin, the painkiller Purdue began marketing in 1996.
Purdue filed for bankruptcy in 2019 after thousands of cities, states, territories and individuals filed lawsuits, alleging the company and its owners fueled waves of addiction and overdose deaths.
Under the new plan, the Sacklers and Purdue increase their contribution to the deal to $7.4 billion. The revised settlement resolves all civil claims against Purdue, but individual creditors can choose to litigate claims against the Sacklers, who have long argued that while they regret their company’s role in the country’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 an agreement that maximizes value for victims and communities and puts billions of dollars to work for the public good,” Purdue President Steve Miller said in a statement. 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 additional value” by creating a new company, Knoa Pharma, that will “provide millions of doses of opioid use disorder treatments and overdose reversal medications on a not-for-profit basis,” according to Purdue’s statement.
