Members of the Sackler family, owners of Purdue Pharma, have offered up to $6 billion to resolve the company’s bankruptcy settlement, two months after a federal judge overturned it due to a provision that protected them from civil liability in connection with the opioid crisis in the United States.
A court-appointed mediator released a report on Friday detailing the new offer, which is up to $1.5 billion more than an earlier settlement agreed to by a majority of plaintiffs, including US states, localities and opioid victims.
No final agreement has yet been reached, according to the mediator, who asked the court to extend its deadline for further discussions until February 28.
The original settlement reached in federal bankruptcy court was dismissed following a legal appeal by a group of eight US states and the attorney for the Southern District of New York, who argued that the owners of the Sackler family benefited from the bankruptcy process without having personally filed a petition. Chapter 11 protection themselves.
Opponents pointed to an analysis presented to the bankruptcy court that showed members of the Sackler family, owners of Purdue, withdrew more than $10 billion from the company between 2008 and 2017.
As a condition of the Sacklers’ contribution to the original deal, family members had demanded that they could no longer be sued for liability. Lawyers for Purdue warned that without such a settlement, years of litigation would delay payments to victims and reduce the available pot.
Purdue, maker of the powerful painkiller OxyContin, filed for bankruptcy in New York in 2019 amid a wave of litigation over its alleged role in the opioid epidemic that has killed more than 500,000 Americans. The court-supervised restructuring was used to end the lawsuits against Purdue and the Sacklers to facilitate a global settlement.
The mediator’s report noted that a settlement is within reach with a super majority of the nine opponents agreeing to the new terms. However, Sackler’s offer is conditional on all opposing parties agreeing, he said.
Under the revised settlement offer, members of the Sackler family would contribute between $5.5 billion and $6 billion, with some of the additional cash dependent on the sale of assets. All money would be used exclusively for opioid crisis reduction, including support and services for survivors, victims and their families.
Under the original settlement agreement, Purdue’s assets were to be transferred to a new company that would develop treatments for opioid abuse and manufacture drugs unrelated to pain relief. In return, members of the Sackler family would be protected from legal action for their alleged role in fueling the opioid crisis.
Last year, more than 100,000 Americans died from drug overdoses.