Purdue Pharma’s bankruptcy proceedings have entered a potentially conclusive phase with the submission of a revised $7.4 billion plan aimed at resolving thousands of lawsuits alleging that its OxyContin painkiller contributed to the U.S. opioid crisis. This development follows a U.S. Supreme Court decision that overturned an earlier proposed $6 billion settlement, which would have shielded the Sackler family from civil liability.
The new plan outlines the distribution of funds to states, local governments, and individuals affected by the opioid epidemic. Purdue Pharma intends to solicit votes and opt-in decisions from creditors in May, after which the plan will be presented for final judicial approval.
Throughout the bankruptcy process, which began in September 2019, significant legal fees have been incurred. Davis Polk & Wardwell, Purdue’s lead bankruptcy lawyers, have received or requested over $250 million in fees. A U.S. bankruptcy judge has approved $246 million for the firm, with an additional $12.2 million requested for services rendered from September 2024 to January. These fees reflect a 20% reduction from standard rates, with Marshall Huebner’s hourly rate at $2,645 and associates billing up to $1,780 per hour.
The high billing rates are consistent with trends in major corporate bankruptcies, where hourly rates often exceed $2,500. Purdue Pharma’s Chapter 11 filing was initiated to address debts stemming from thousands of lawsuits related to OxyContin’s role in the opioid epidemic, which has resulted in over half a million U.S. overdose deaths over two decades.
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