Mediator: Purdue Pharma close to reaching a new settlement
The attorneys general for eight holdout states and the District of Columbia are close to reaching a new settlement with OxyContin maker Purdue Pharma that would require members of the family who own the company to increase their contribution to the deal, according to a court filing.
A judge Tuesday gave them 16 more days of protection from lawsuits over the toll of the drugs while the details are worked out.
Legal protections for members of the Sackler family had been set to expire Tuesday, opening the floodgates for new or resumed claims that individuals in the billionaire family bore personal responsibility for an opioid crisis that has been linked to the deaths of more than 500,000 Americans over the past two decades.
At a hearing held by video conference from his White Plains, New York, courtroom, U.S. Bankruptcy Judge Robert Drain agreed to the extend legal protections for family members for the 12th time since 2019.
The ruling came a day after a second bankruptcy judge who is serving as a mediator in the matter said the Sacklers and other parties are close to a new settlement.
The judge, Shelley Chapman, said in the court filing Monday that members of the Sackler family would contribute a “substantial additional consideration” above the $4.5 billion in cash and charitable assets they’ve already agreed to pay as part of a deal, along with giving up ownership of Stamford, Connecticut-based Purdue.
She said that the attorneys general for eight states and the District of Columbia who objected to a previous settlement deal were close to agreeing in principle to the new one.
Chapman said mediation should wrap up by Feb. 7.
Drain said he would OK that and also grant Purdue's request to keep legal protections in place for Sackler family members until Feb. 17.
Drain said that if a deal isn't in place by then, “all bets are open" as to whether he would protect the family again.
The effort to reach a new settlement is the latest chapter in a complicated legal saga through bankruptcy court.
Last year, the overwhelming majority of Purdue's creditors, including state and local governments, Native American tribes and individual victims of the opioid crisis agreed to a settlement, which Drain approved. But in December, another judge dismissed it, ruling that Drain lacked jurisdiction to let the Sacklers off the legal hook when some parties disagreed. That ruling is being appealed.
At Tuesday's hearing, only one lawyer pushed against extending legal protections for members of the family, which is collectively worth billions: Joe Rice, a lead lawyer for local governments who had sued Purdue. He argued that it was time to open other legal options in a case that has rung up legal and professional fees of $740 million so far.
A Purdue lawyer pointed out that more than half of those costs were to pay to notify victims they could request a piece of a settlement and to pay the legal costs of the company's creditors.