A federal bankruptcy judge has approved a $8.3 billion settlement between Stamford”™s Purdue Pharma and the Department of Justice.
Under the ruling by Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York in White Plains, Purdue Pharma will plead guilty to three felony counts of criminal wrongdoing. The OxyContin manufacturer is expected to be reorganized into a public benefit corporation, with profits from future opioid sales to be used for programs to assuage the nation”™s opioid addiction crisis.
Purdue Pharma filed for bankruptcy in 2019 in the face of thousands of civil lawsuits brought against it by a number of states, counties and municipalities.
The Sackler family, descendants of Purdue founder John Purdue Gray and who maintained majority control of the company, are divesting themselves of ownership and have agreed to pay $225 million while admitting no wrongdoing and facing no criminal charges.
The settlement was announced last month, but a number of plaintiffs ”“ including New York and Connecticut Attorneys General Letitia James and William Tong ”“ have vowed to fight on. Neither James nor Tong have offered comment on Drain”™s decision as of this morning.
“The DOJ settlement mandates the preservation of the OxyContin business under the government’s protection as a public benefit company. This requirement in the settlement is improper, corrosive to public faith in government and offensive to the tens of thousands of families who have been harmed,” a group of families affected by the opioid epidemic said in a statement.
“This milestone settlement should be approved now ”“ not delayed, deferred, or risked,” Purdue said in a statement. “If approved, the DOJ resolution will preserve billions of dollars of value for creditors other than the federal government and will maximize the value available to address the opioid crisis.”
