A group of insurers have convinced the judge overseeing Purdue Pharma LP’s bankruptcy to halt litigation over the scope of the OxyContin maker’s insurance policies so the matter can go to arbitration instead, Reuters reported. U.S. Bankruptcy Judge Robert Drain in White Plains, New York said he would stay the case during a virtual hearing on Monday. He determined that the company’s insurance coverage is not critical to its proposed reorganization that includes a settlement that resolves extensive litigation accusing it of fueling the national opioid crisis through deceptive marketing. “The insurance dispute here, while clearly important, in the context of these chapter 11 cases, is not so fundamentally important as to warrant its centralization in the court presiding over the bankruptcy cases,” Judge Drain said. The insurers include AIG Specialty Insurance Co, represented by Willkie Farr & Gallagher, and Liberty Mutual Insurance Europe SE, represented by Abrams Gorelick Friedman & Jacobson. The arbitration, which can start now, likely will not conclude until well after Purdue's bankruptcy wraps up.
