Purdue Pharma LP and the company’s Sackler family owners will be shielded until April 8, 2020, from sprawling opioid litigation to give the maker of OxyContin time to try to reach a legal settlement the company says is worth $10 billion, Reuters reported. Bankruptcy Judge Robert Drain said yesterday that he would approve an order extending a stay on more than 2,600 lawsuits that accuse Purdue and the Sacklers of fueling a crisis that contributed to 400,000 U.S. deaths between 1999 and 2017. Drain, whose court is in White Plains, New York, ordered a brief stay of the litigation in October. While the litigation is on hold, Purdue and the Sacklers committed to share information with the states, municipalities, Native American tribes, hospitals, individuals and others who have sued. Purdue filed for bankruptcy in September to try to corral the parties to one court and build support for its proposed settlement, which will now be evaluated through the discovery process with the company and the Sacklers. Read more.
In related news, bankruptcy scholars on Tuesday called for an independent probe of the Sackler family’s dealings with OxyContin maker Purdue Pharma LP, which sought court protection from an avalanche of lawsuits over the opioid epidemic, WSJ Pro Bankruptcy reported. “The extraordinary public interest in these cases warrants a targeted bankruptcy examination,” law professors Jonathan Lipson, Adam J. Levitin and Stephen J. Lubben wrote in a letter to federal watchdogs overseeing the drugmaker’s bankruptcy. Purdue Pharma filed for chapter 11 protection with an agreement in hand for the Sacklers to settle allegations that their management of the company helped fuel a wave of addiction. Some state attorneys general also have alleged the Sacklers siphoned money from the company when they knew or should have known it was overrun by legal liabilities. The call for an outside investigation came on the eve of a hearing where Purdue Pharma is asking Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York to extend a standstill on litigation against the Sacklers. The Sacklers have denied wrongdoing but offered $3 billion and other concessions in exchange for a grant of immunity as part of Purdue Pharma’s bankruptcy. The company has agreed to hand over its business to creditors as compensation for its alleged responsibility for the opioid crisis. Read more.
