Craig Landau, chief executive officer of bankrupt opioid maker Purdue Pharma LP, will get a much-reduced bonus this year after months of fighting with creditors, Bloomberg News reported. Bankruptcy Judge Robert Drain approved a $1.3 million bonus for Landau in a Friday hearing. That’s less than half of what Purdue planned on paying him. The company agreed to slash the payout by 63 percent, court papers show, and Landau will receive the sum in two disbursements this year rather than one in the spring. Landau agreed to “cuts and changes far deeper than any other employees at Purdue” and the company “bent over backward multiple times to reach peace,” Marshall Huebner of Davis Polk & Wardwell LLP said in the hearing. A group of states — ones opposing a proposed settlement between Purdue and parties suing Purdue for its role in the U.S. opioid crisis — have for months pressed the bankruptcy judge to strike down any bonus payments to Landau, pointing to lawsuits in which the executive is accused of playing a role in the crisis. The judge for months delayed ruling on Landau’s bonus, encouraging the company to negotiate with creditors. The lawyers argued that Landau’s pay was already well below the market rate and that a small number of still-pending lawsuits do not offset the need to have Landau, a longtime Purdue executive, guide the company through bankruptcy.
In related news, the federal judge overseeing the bankruptcy case of Purdue Pharma has set a June 30 deadline to file a claim against the company, the Associated Press reported. That includes governments, entities such as hospitals and, for the first time, individuals who have personal injury claims. It’s unclear how much money might be at stake. Purdue reached an agreement with some states and local governments that could be worth more than $10 billion over time as part of its bankruptcy filing. But Judge Robert Drain emphasized during a hearing Friday in White Plains, N.Y., that no final settlement is in place. Once a settlement and restructuring deal for Purdue is approved, the next step will be deciding how to divide the company’s assets. There is no guarantee those who became addicted to opioids or their families would receive any money, and the judge emphasized that the claims would be open only to people who believe they were harmed by Purdue’s products, not opioids generally. Still, lawyers for plaintiffs say people should file claims even if they’re not sure Purdue’s drugs were involved in their injuries. Read more.
