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Judge Keeps Purdue Pharma in Business During Cases

Settlement figures on the OxyContin maker remaining viable
By Newser Editors and Wire Services
Posted Sep 17, 2019 6:48 PM CDT
People enter the U.S. District Court in White Plains, New York, on Tuesday, where Purdue Pharma had a court date.   (AP Photo/Seth Wenig)

(Newser) – A judge cleared the way Tuesday for OxyContin maker Purdue Pharma to stay in business while it pursues bankruptcy protection and settlement of more than 2,600 lawsuits filed against it in a reckoning over the opioid crisis. At the first hearing since the Chapter 11 filing Sunday, Purdue secured permission for the multibillion-dollar company to maintain business as usual—paying employees and vendors, supplying pills to distributors, and keeping current on taxes and insurance. The viability of Purdue is a key component of the company's settlement offer, which could be worth up to $12 billion over time, the AP reports. Under the proposal, backed by about half the states, the Sackler family, which owns Purdue, would turn the company and more than $1 billion in cash reserves over to a trust controlled by the entities suing it.

The Sacklers agreed to pay at least $3 billion of their own to the settlement over seven years, as well as up to $1.5 billion from the sale of their non-US pharmaceutical companies. "This is a highly unusual case in that the debtors have pledged to turn over their business to the claimants," US Bankruptcy Judge Robert Drain said. "All of the claimants, in essence, have the same interest in maximizing the value of the business and avoiding immediate and irreparable harm." Joe Rice, a lawyer for some of the plaintiffs, said it could be more than a year before the bankruptcy and settlement are finalized. The bankruptcy filing has effectively frozen litigation against the company, but not the lawsuits against the Sacklers. New Hampshire just filed a new suit against them, per WMUR.

(Read more Purdue Pharma stories.)

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