Bankrupt Purdue buys time to advance $7.4 billion | Stock News

By Dietrich Knauth

NEW YORK (Reuters) – Purdue Pharma mentioned on Friday it wants more time to construct help for a new $7.4 billion settlement that would full the company’s years-long effort to resolve hundreds of lawsuits over its addictive ache treatment OxyContin.

The company nonetheless must hammer out remaining particulars and search buy-in from states, native governments, and different collectors which have sued the company and its Sackler household homeowners over their roles within the lethal U.S. opioid epidemic.

Purdue lawyer Benjamin Kaminetsky mentioned at a court docket listening to in White Plains, New York that the company is “almost there” on a deal that was introduced on Thursday by a number of states’ attorneys basic and would suggest a formal chapter plan earlier than the top of February.

U.S. Chapter Choose Sean Lane, who’s overseeing Purdue’s Chapter 11 proceedings, mentioned the company is making concrete progress towards a deal and permitted its request to pause all opioid lawsuits towards the Sacklers not less than till the top of February.

The chapter case has stopped litigation from continuing towards the Sacklers and Purdue, because the company entered Chapter 11 in 2019, and Lane has granted a number of short-term extensions of the litigation ceasefire in current months.

“We’ve been doing this for some time now, and the hope is that we’re getting toward the end,” Lane said on Friday.

Purdue filed for bankruptcy in 2019 in the face of thousands of lawsuits accusing it and Sackler family members of fueling the epidemic through deceptive marketing of OxyContin. Drug manufacturers, distributors, pharmacy operators and others have collectively agreed to pay about $50 billion to resolve similar lawsuits and investigations related to the U.S. opioid crisis.

The new deal, supported by 15 states, offers the company a fresh chance to conclude its long-running bankruptcy after the U.S. Supreme Court scuttled its previous opioid settlement. But it faces a long and uncertain road before the settlement is approved and funds can begin flowing to states, communities and individuals that were harmed by the crisis.

The deal has not yet been reviewed by most of Purdue’s creditors, including the states, local governments, and individuals that have legal claims against the Sacklers.

Key terms of the settlement will be published next week, said David Nachman, an attorney representing New York state. The states that negotiated the deal, including New York, California, Texas and West Virginia, are circulating it to other states to encourage them to support the deal.

“We have now work to do to construct that consensus, and we’re assured that we can accomplish that,” Nachman mentioned.

The new settlement comes seven months after the Supreme Courtroom ruled that the Sacklers, who didn’t file for chapter themselves, weren’t entitled to sweeping legal protections meant to provide bankrupt debtors a recent begin.

The settlement doesn’t absolutely shut off lawsuits from states, native governments, or others who would like to choose out of the deal and as a substitute sue the Sacklers, who’ve mentioned they might vigorously defend themselves in court docket.

The deal shouldn’t be but binding even for the 15 states that negotiated it. West Virginia presently helps the deal, but it surely retains the power to choose out and litigate individually, based on a spokesman for lawyer basic John McCuskey.

Lane mentioned collectors, together with people who had been personally harmed by the opioid disaster, will need to be affected person because the settlement develops.

“People need to know what benefits the bankruptcy case can bring them before they decide whether other options are the best way to proceed,” Lane mentioned.