Purdue Pharma LP, which is facing approximately 2,000 lawsuits tied to deceptive marketing of its opioid products, is reportedly studying the possibility of filing for Chapter 11 bankruptcy.
According to a Reuters report citing unnamed “people familiar with the matter,” the Stamford-headquartered company is taking a second look at Chapter 11, which would enable it to avoid the onslaught of lawsuits and pursue negotiated settlements with plaintiffs under the supervision of a U.S. bankruptcy judge.
Last August, the company hired the law firm Davis Polk & Wardwell LLP for restructuring advice, which sparked initial concerns that it would seek a bankruptcy route out of its legal problems, but to date Purdue Pharma has chosen to meet the legal challenges head-on.
The company would not address the veracity of the Reuters report. “As a privately held company, it has been Purdue Pharma’s longstanding policy not to comment on our financial or legal strategy,” Purdue said in a statement. “We are, however, committed to ensuring that our business remains strong and sustainable. We have ample liquidity and remain committed to meeting our obligations to the patients who benefit from our medicines, our suppliers and other business partners.”
However, Connecticut Attorney General William Tong issued his own statement that his office would not accommodate this scenario.
“We will oppose any attempt to avoid our claims, and will continue to vigorously and aggressively pursue our claims against Purdue and the Sackler family,” said Tong.
Tong’s predecessor as attorney general, George Jepsen, used a Wall Street Journal op-ed column published on Sunday to urge municipalities to drop their opioid-related lawsuits against Purdue Pharma and allow state attorneys general to “structure state-centric deals under which localities can beneﬁt if they drop their lawsuits.”
Seventeen Connecticut municipalities have filed lawsuits against the company, but a state judge dismissed them in January with a ruling that argued they had no standing to sue. Appeals of that decision are expected later this year.