The family members who own OxyContin maker Purdue Pharma LP required broad legal releases extinguishing opioid lawsuits against them as a condition for funding what became a roughly $4.5 billion settlement proposal, a company director testified yesterday during a bankruptcy trial examining the deal, WSJ Pro Bankruptcy reported. John Dubel, a restructuring specialist who joined Purdue’s board months before it filed chapter 11 in September 2019, said the Sackler family members who own the company required third-party releases as a prerequisite for a settlement so they would “be able to put all of the litigation behind them.” Dubel’s testimony came during the first day of a bankruptcy trial in New York over the settlement and Purdue’s broader chapter 11 plan, which would fund opioid abatement programs. He described the discussions while answering questions from a lawyer for Connecticut, where Purdue is based and one of a handful of states opposing the plan. The inclusion of legal immunity for the Sacklers, under nonconsensual third-party releases, is being challenged in the bankruptcy case by federal and state authorities. These legal releases have also drawn newfound scrutiny from Congressional Democrats. If U.S. Bankruptcy Judge Robert Drain approves the releases, civil claims against the Sacklers would be extinguished even if a minority of creditors and some states oppose the family’s settlement offer. The Sacklers have been named as defendants in civil litigation alleging they share liability for fueling opioid addiction, which they deny. Purdue pleaded guilty to federal felonies last year over its marketing of OxyContin, an opioid painkiller. The company has said the releases are necessary and boosted the value of the settlement to the benefit of all its creditors, while averting years of uncertain litigation.
