A large majority of Purdue Pharma’s more than 120,000 creditors have voted to approve the company’s bankruptcy plan, a major step toward the eventual release of more than $ 4.5 billion to help cover the cost of the opioid epidemic and its settlement Thousands of lawsuits to be paid against the company and its owners, members of the billionaire Sackler family.
A preliminary poll by cities, states, tribes, insurers, families and caregivers of babies born with withdrawal symptoms after exposure to opioids in utero showed 95 percent are in favor of the plan, the company said.
According to the plan, the Sacklers would give up control of Purdue. The restructured company was to be resurrected under a new name and run by an independently appointed board of directors. Profits the sale of its signature prescription pain reliever, OxyContin, and addiction quenching drugs would go to creditor trusts that would fund addiction prevention and treatment programs.
The Sacklers, who did not file for personal bankruptcy, would pay at least $ 4.5 billion of their personal wealth over nine years (in addition to $ 225 million from a separate civil settlement with the Justice Department).
Neither the company nor the Sacklers would admit any wrongdoing in connection with these lawsuits.
In the past two decades, more than 500,000 people have died from prescription and illegal opioid overdoses in the United States, including a record number in 2020. Purdue, which is widely believed to have helped ignite the problem by causing it Has downplayed OxyContin’s addictive potential and aggressively marketed the drug with misleading campaigns pleaded guilty to two separate Justice Department inquiries.
For the complex plan to take effect, Judge Robert Drain must be signed by the US Bankruptcy Court for the southern borough of New York, a move long awaited and now made even more likely by the wholehearted result of the creditors’ vote. Purdue said it would release the final voting results on August 2nd, a week before a court hearing at which final objections will be raised, but the company does not expect those results to change materially. The judge is expected to rule shortly thereafter.
Although a handful of states, including the Justice Department, have objected to the plan, these efforts do not appear to cause the process to fail. Earlier this month, attorneys general of 15 states, including Massachusetts and New York, were among the most vocal objection, said they had negotiated new terms that made the plan more palatable and now supportive of the plan.
Among the new elements that reached the states and Purdue during the mediation was an agreement by the company to release more than 30 million documents to a public repository, including private communications with attorneys. These documents are expected to reveal the full history of the Company and Sacklers involvement in the sale of OxyContin.
Long known for their philanthropy in the arts, the Sacklers would give up future naming rights to any institutions they donate to until their contributions to the opioid agreement are paid in full.
For almost two years, the opposition states argued that they should be able to reach straight into the pockets of individual sacklers because they were not filing for bankruptcy protection themselves. However, under the terms of the Purdue Plan, the Sacklers and their company are exempt from any civil liability.
Some congressmen have passed legislation to fill a loophole in bankruptcy law. It would allow states, and possibly individuals, to sue for bankruptcy third-party business owners who, like the Sacklers themselves, have not filed for bankruptcy. But by the time the bill is passed, the Purdue plan and the status of the Sacklers will almost certainly be cleared up.
