Purdue Pharma’s Creditors Overwhelm Its Bankruptcy Plan

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The vast majority of Purdue Pharma’s more than 120,000 creditors voted to approve the company’s bankruptcy plan, an important step toward the eventual release of more than $4.5 billion to help pay the costs of the opioid epidemic and resolve thousands of lawsuits. against the company and its owners, members of the billionaire Sackler family.

Preview of voting by cities, states, tribes, insurers, families and babysitters giving birth withdrawal symptoms The company said 95 percent of exposure to opioids in utero showed support for the plan.

According to the plan, the Sacklers would relinquish control of Purdue. The restructured company will re-emerge under a new name and be managed by an independently appointed board of directors. profits It would flow from sales of the signature prescription pain reliever OxyContin and addiction-reversing drugs to creditors’ trusts that would fund addiction prevention and treatment programs.

Sacklers, who has not filed for personal bankruptcy, will pay at least $4.5 billion in personal funds over nine years (in addition to $225 million from a separate bank). civil settlement with Ministry of JusticeT).

Neither the company nor Sacklers will accept misconduct in connection with these lawsuits.

In the last twenty years, more than one 500,000 people exists in the United States died overdoses of prescription and illegal opioids A record annual number in 2020. Purdue, which is widely believed to help exacerbate the problem by downplaying the addictive potential of OxyContin and aggressively marketing the drug with misleading campaigns. guilty in two to separate Investigation by the Ministry of Justice

For the complex plan to go into effect, U.S. Judge Robert Drain of the Bankruptcy Court for the Southern District of New York must sign off on a long-awaited move now made even more likely by the full-blown results of creditor votes. Purdue said it will release final voting numbers on August 2, a week before a court hearing where final appeals will be announced, but the company doesn’t expect these results to change significantly. The judge is expected to make a decision soon.

Although a handful of states objected to the plan, Ministry of Justice, these efforts seem unlikely to derail transactions. earlier this month, attorneys general in 15 states Those among the most vocal opponents, including Massachusetts and New York, said they were negotiating new terms that made the plan more acceptable and now support the plan.

Among the new elements that the states and Purdue reached during mediation was the company’s agreement to release more than 30 million documents into a public repository, including private conversations with lawyers. These documents are expected to reveal the full story of the company and Sacklers’ involvement in the sale of OxyContin.

The Sacklers, long known for their philanthropy in the arts, would forego future naming rights to the institutions they donated until their contributions to the opioid deal were paid in full.

For nearly two years, contesting states argued that individual Sacklers should have direct access to their pockets because they did not file for bankruptcy protection. However, under the terms of the Purdue plan, the Sacklers and their companies were exempted from all legal liability.

Some members of Congress have passed legislation to close a loophole in the bankruptcy law. It would allow states, and possibly individuals, to sue third-party owners of a bankrupt company that has not filed for bankruptcy themselves, such as Sacklers. But if the law is passed, it will be a long time before the Purdue plan and Sacklers’ case are almost certainly resolved.

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