Purdue Pharma is advancing toward a fresh bankruptcy settlement with its owners, the Sackler family, and a coalition of state and local governments that filed lawsuits claiming Purdue’s flagship painkiller, OxyContin, sparked the deadly opioid crisis in the United States. The mediator in the case, Shelley Chapman, provided an update during a Thursday hearing in White Plains, New York, suggesting that Purdue and other stakeholders have made considerable headway in negotiating a deal to resolve these complex lawsuits. Chapman mentioned that she would soon submit a detailed report on the mediation’s progress.
“The parties are making daily progress, and we believe the outstanding issues are solvable,” said Chapman. As a result of this progress, U.S. Bankruptcy Judge Sean Lane decided to extend a pause on opioid-related lawsuits against the Sacklers until December 2. According to Chapman, resuming the lawsuits at this stage could undermine ongoing settlement efforts and deplete funds that should be allocated toward compensating victims of the opioid crisis.
Reflecting on the sensitive nature of the negotiations, Chapman stated, “You can’t make war and peace at the same time.” She emphasized that for the mediation to be successful, all parties must remain fully focused and engaged in the process without distractions from ongoing legal battles.
The mediation follows a significant setback when the U.S. Supreme Court intervened and blocked Purdue’s earlier bankruptcy plan. That plan had promised to shield the Sacklers from future opioid-related lawsuits in exchange for a financial contribution of up to $6 billion toward efforts to counter the opioid epidemic. However, the Supreme Court ruled on June 27 that bankruptcy protections could not extend to the Sacklers, as they had not personally declared bankruptcy, a decision that sent Purdue back to the negotiating table.
Neither Chapman nor attorneys representing state and local governments provided specifics on the latest deal terms. Nonetheless, government attorneys expressed optimism that a new settlement could be finalized before December 2, when the current freeze on litigation is set to expire. If the mediation ultimately falls short, a court-appointed committee representing Purdue’s creditors is prepared to sue the Sacklers, with allegations that the family siphoned off more than $11 billion from the company and, in doing so, increased Purdue’s exposure to additional lawsuits.
Since filing for bankruptcy in 2019, Purdue Pharma and the Sacklers have faced numerous lawsuits from state and local governments and individual plaintiffs, all alleging that Purdue’s marketing strategies drove the opioid crisis. The company previously admitted to criminal misbranding and fraud charges linked to its promotion of OxyContin, with guilty pleas entered in both 2007 and 2020.
Read more: