Judge to rule on Purdue Pharma bankruptcy plan that shields Sacklers
September 1, 2021
By Tom Hals
(Reuters) – A U.S. judge is expected to rule on Wednesday on OxyContin maker Purdue Pharma’s request to approve its bankruptcy reorganization plan that would shield the company’s Sackler family owners from future litigation over the opioid crisis.
If U.S. Bankruptcy Judge Robert Drain approves the deal, which Purdue values at more than $10 billion, it would clear a path to resolve thousands of opioid lawsuits.
The plan would dissolve the drugmaker and shift assets to a new company owned by a trust rather than the Sackler family members.
The new company would be run to combat the opioid epidemic in U.S. communities that alleged Purdue and its owners aggressively marketed the painkiller OxyContin while playing down its abuse and overdose risks.
The plan includes legal releases shielding Sackler family members from future opioid litigation, a controversial provision that some states opposed.
The Sacklers have denied allegations, raised in lawsuits and elsewhere, that they bear responsibility for the U.S. opioid epidemic. They have said they acted ethically and lawfully while serving on Purdue’s board.
The Purdue bankruptcy plan includes a $4.5 billion contribution from Sackler family members. The contribution is in the form of cash that would be paid over roughly a decade and also includes $175 million in value from relinquishing control of charitable institutions.
“In our view, the Sacklers are responsible for extensive harm in Maryland and nationwide,” said Maryland Attorney General Brian Frosh in a statement on Tuesday. “This plan allows the Sacklers to enjoy riches amounting to billions of dollars.”
The legal fight will likely drag on beyond Wednesday’s ruling. Connecticut Attorney General William Tong, who has opposed the plan, is preparing to appeal if necessary, according to his office.
The Stamford, Connecticut-based drugmaker pleaded guilty to criminal charges in November stemming from its handling of opioids.
(Reporting by Tom Hals in Wilmington, Delaware; Editing by Noeleen Walder and Bill Berkrot)