Five months after filing a restructuring plan in bankruptcy court minutes before a deadline, Purdue Pharma’s attempt to resolve thousands of opioid drug lawsuits with a $4.325 billion settlement may be entering its final phase.
Purdue Pharma, the company behind the painkilling drug, Oxycontin, and considered by many to be the face of the nation’s opioid epidemic that has killed over half a million people, recently appeared before a U.S. Bankruptcy Court judge to ask for approval of its plan to reorganize into a new entity no longer controlled by members of the wealthy Sackler family, and with profits dedicated to abating the opioid crisis, ClaimsJournal.com reported.
The company first filed for bankruptcy protection in 2019, when it faced over 3,000 lawsuits, mostly filed by cities, counties, states, tribal nations and individuals. Plaintiffs who filed claims alleged that the company’s sales practices were deceptive and at least partly responsible for the opioid crisis.
According to NBC News, some of the lawsuits also allege that after 2007, the Sackler family drained the company of money to enrich themselves.
Late last year, Forbes estimated the collective net worth of the 40 or so Sackler family members who helmed Purdue Pharma to be worth nearly $11 billion—even after deducting fines paid in settlement fees. By 2030, ClaimsJournal.com reported that despite the bankruptcy settlement plan, the family’s net worth could exceed $14 billion by 2030 because of investments and interest.
As part of the restructuring deal, members of the Sackler family will not have to file for bankruptcy and will not have to admit wrongdoing.
Despite the terms that seem to be favorable towards members of the Sackler family and the relatively low individual compensation, well over 90% of creditors—including individual plaintiffs and municipal governments—voted to approve the plan, which will net individual claimants anywhere from $3,500 to $48,000.
Ed Neiger, a lawyer representing individual victims and their families, is planning to tell U.S. Bankruptcy Court Judge Robert Drain that it’s better to approve the settlement plan than to have years more of court battles with Purdue and the Sacklers, ClaimsJournal.com reported.
“The plan must be analyzed in light of the alternative, not a comparison to the ideal,” said Neiger. “Five hundred thousand people have died as result of the opioid crisis thus far. If we go the all-out litigation route, another 500,000 might die before we see a penny from the Sacklers.”
Opponents of the plan who have filed claims against Purdue argue that even if awarded the maximum compensation, that amount is nowhere near enough to cover medical expenses allegedly caused by problems associated with Purdue’s prescription painkillers. According to an NPR report, many individuals who are seeking settlement claims with Purdue have written deeply personal letters to Judge Drain, imploring him not to approve the plan.
