Purdue gets bankruptcy approval from the majority of its creditors.
Creditors have gotten one step closer to unlocking Purdue’s opioid settlement funds as the majority have approved the company’s proposed bankruptcy terms. More than 120,000 have signed on to the deal, which will lead to the eventual release of more than $4.5 billion dollars over the cross of nine years to pay for addiction prevention and treatment. If the bankruptcy moves forward and the funds are released, this will resolve thousands of lawsuits against the Purdue and its owners, members of the billionaire Sackler family once known for its philanthropy efforts.
“Preliminary tabulation of voting by cities, states, tribes, insurers, families and caregivers of babies born with symptoms of withdrawal from being exposed to opioids in utero shows that 95 percent favor the plan,” the company said. It is expected to release an updated tally in early August.
After initially filing for Chapter 11 and proposing a bankruptcy settlement, Purdue indicated, “Absent [bankruptcy] protection, this case will fail because the fundamental goal of this and any bankruptcy will have been thwarted.” There was significantly pushback when the plan was first introduced. Many wanted the owners to be held personally responsible for the addiction crisis. But experts and those closest to the matter had indicated last year that they expected the drug maker to get what it had proposed.
A Sackler representative had also stated at the time, “Our family continues to believe that the bankruptcy reorganization process is the most efficient and effective way to reach a resolution that delivers critical resources to the individuals, families and communities most in need.”
Under the plan, the owners would relinquish control of Purdue and restructure the company so that it would take on a new name and be run by an independently appointed board of directors. Profits from OxyContin and addiction-reversal medications would be deposited into creditors’ trusts to manage treatment and prevention efforts. The Sacklers would also release future naming rights to any institutions until their contributions to the settlement are paid in full. Purdue Pharma and members of the Sackler family would not have to admit to any wrongdoing, and the family and company will have been released from all civil liability.
Nearly 500,000 people died from opioid overdoses in the United States from 1999 to 2019, according to the U.S. Centers for Disease Control and Prevention (CDC), which has identified three waves of the opioid crisis, overall. Provisional data shows that 2020 was a record year for overdose fatalities with 93,331, up 29% from the previous year, according to the agency. Purdue pleaded guilty to two separate investigations by the Department of Justice well before the onslaught of its latest legal trouble.
Even those states that had held out the longest, including Massachusetts and New York, have reported the negotiation new terms and are in support. Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York must sign off on the bankruptcy deal for it to officially take effect.