Purdue Pharma Bankruptcy Settlement Negotiations

By Dietrich Knauth

NEW YORK (Reuters) – Purdue Pharma is nearing a new bankruptcy settlement involving its owners, the Sackler family, as well as state and local governments that have filed lawsuits. These lawsuits allege that Purdue’s painkiller OxyContin contributed to the opioid addiction crisis in the U.S., according to court-appointed mediator Shelley Chapman.

During a court hearing in White Plains, New York, Chapman stated that Purdue has made strides toward a comprehensive deal to resolve the lawsuits and plans to submit a written report on the mediation's progress soon.

> "The parties are getting closer and closer by the day, and the remaining issues, in our view, are resolvable," Chapman noted.

Based on Chapman’s comments, U.S. Bankruptcy Judge Sean Lane ruled that lawsuits against the Sacklers will remain on hold until December 2. Chapman expressed concern that resuming lawsuits would hinder settlement negotiations and divert resources meant for opioid creditors.

> "You can’t make war and peace at the same time," Chapman said. "In order for the mediation to succeed, we need the full, undistracted attention of all the parties."

Purdue's previous bankruptcy plan was disrupted by a U.S. Supreme Court ruling, which overturned its proposal that would have granted extensive legal protections to the Sacklers in return for up to $6 billion to address opioid-related harms in the U.S.

Chapman did not reveal any details about the new negotiations. Attorneys for state and local governments were cautious yet optimistic about reaching an agreement before the December 2 deadline.

On June 27, the Supreme Court declared that Purdue Pharma’s bankruptcy settlement cannot protect the Sacklers from lawsuits due to their involvement in the opioid crisis.

Opioid lawsuits against Purdue and the Sacklers have been on hold since 2019 when the drugmaker filed for bankruptcy. They face accusations from state and local governments, along with individual plaintiffs, for exacerbating the crisis through misleading marketing of OxyContin. Purdue has previously admitted to misbranding and fraud charges regarding its pain medication.

If mediation fails, a court-appointed committee representing Purdue’s creditors can pursue legal action against the Sacklers for allegedly draining over $11 billion from the company and rendering Purdue liable for additional lawsuits.