By Dietrich Knauth and Nate Raymond
NEW YORK (Reuters) -A federal bankruptcy judge said on Friday he will approve a restructuring plan for drugmaker Purdue Pharma that includes a $7.4 billion settlement resolving claims that it fueled the U.S. opioid epidemic through the sale of addictive pain medications like OxyContin.
U.S. Bankruptcy Judge Sean Lane, during a hearing in White Plains, New York, indicated he plans to sign off on Purdue’s Chapter 11 plan, capping off a years-long bankruptcy case that began in 2019, the Stamford, Connecticut-based company said.
Lane is expected to issue a full, detailed decision on Tuesday.
“The plan is the product of intense work with our creditors through a singular, shared focus on delivering as much value as possible to meaningfully address the opioid crisis,” Steve Miller, Purdue’s board chairman, said in a statement.
PURDUE CREDITORS INCLUDE GOVERNMENTS, INDIVIDUALS
Purdue filed for bankruptcy in 2019 while facing more than 2,600 lawsuits by states, local governments and others accusing it of contributing to the deadly opioid abuse epidemic through its marketing and sale of OxyContin and other pain medications.
Purdue’s creditors include state and local governments, individuals who became addicted to OxyContin, hospitals and others who were harmed by the opioid crisis.
Its efforts to resolve their claims ran aground in 2024 when the U.S. Supreme Court rejected Purdue’s previous bankruptcy settlement and forced the company to scale back legal protections for its owners, members of the wealthy Sackler family, who had agreed to pay up to $6 billion.
The ruling led Purdue to negotiate a new restructuring plan under which the Sacklers agreed to contribute $6.5 billion to $7 billion while creditors received the option to opt out of waiving their claims and pursue their own lawsuits instead.
MOST SETTLEMENT FUNDS GO TO OPIOID ABATEMENT
Members of the Sackler family have expressed regret for their company’s role in the opioid addiction epidemic but deny wrongdoing.
Most of the settlement funds will be paid to U.S. state and local governments, who have agreed to use the money for opioid abatement efforts such as addiction treatment. Individual opioid epidemic victims are entitled to receive as much as $850 million.
After the bankruptcy, Purdue will be converted into a nonprofit called Knoa Pharma, which will focus on developing and distributing opioid overdose reversal and addiction treatment medications.
Purdue also agreed to create a public library of internal company documents related to its past development and marketing of OxyContin, including the emails of Sackler family members.
(Reporting by Dietrich Knauth in New York and Nate Raymond in BostonEditing by Rod Nickel)
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