A bottle of OxyContin. (AP Photo/Jeff Chiu, File)

A bottle of OxyContin. (AP Photo/Jeff Chiu, File)

After bankruptcy filing, Purdue Pharma may not be off hook

The company’s owners expressed sympathy but not responsibility for the nation’s opioid crisis.

By Geoff Mulvihill and Steve LeBlanc / Associated Press

BOSTON —OxyContin maker Purdue Pharma has embarked on a multibillion-dollar plan to settle thousands of lawsuits over the nation’s deadly opioid crisis by transforming itself in bankruptcy court into a sort of hybrid between a business and a charity.

Whether the company can pull it off remains to be seen, especially with about half the states opposed to the deal.

The pharmaceutical giant filed for bankruptcy late Sunday, step one in a plan it says would provide $10 billion to $12 billion to help reimburse state and local governments and clean up the damage done by powerful prescription painkillers and illegal opioids like heroin and fentanyl, which together have been blamed for more than 400,000 deaths in the U.S. in the past two decades.

The plan calls for turning Purdue into a “public benefit trust” that would continue selling opioids but hand its profits over to those who have sued the company. The Sackler family would give up ownership of Purdue and contribute at least $3 billion toward the settlement.

It will be up to a federal bankruptcy judge to decide whether to approve or reject the settlement or seek modifications.

Two dozen states plus key lawyers who represent many of the 2,000-plus local governments suing the Stamford, Connecticut-based company have signed on to the plan.

But other states have come out strongly against it, arguing that it won’t provide as much money as promised, that the Sacklers are getting off easy and that the family has extracted a fortune from the company and hidden it away in shell companies and Swiss bank accounts.

“The Sackler family sucked billions of dollars out of Purdue and is now throwing the carcass of this drug company into bankruptcy,” said North Carolina Attorney General Josh Stein.

He and his counterparts in such states as Massachusetts, Pennsylvania and New York have said they will continue pursuing the company and the Sacklers in court.

The states in favor of the settlement include Tennessee, Texas and Ohio, where Attorney General Dave Yost said the deal is better than other possibilities.

“The settlement puts the Sacklers out of the drug business permanently — not just in the United States, but around the globe. It takes every last dime that Purdue has and billions more from the Sacklers personally,” Yost said.

“The only alternative involves years of additional litigation in the forlorn hope of getting more personal money for corporate conduct.”

In its bankruptcy filing, Purdue denied it is “seeking refuge” and said the settlement is the best way to deliver the most possible money to the public.

The company projected it will spend $263 million this year on legal expenses and other matters associated with the litigation, and warned that the continuing costs will only reduce the amount of money available to deal with the epidemic.

Federal Bankruptcy Judge Robert Drain in White Plains, New York, will have wide discretion over the case, including whether the states that don’t like the settlement can press on with their lawsuits. Drain is scheduled to hold his first hearing on the bankruptcy plan Tuesday.

“It is likely to change a fair amount by the time when the judge would rule on it,” said Lindsey Simon, a professor at the University of Georgia law school.

Simon said it is also possible the company could switch from Chapter 11 bankruptcy reorganization to Chapter 7 and liquidate the company if the plan looks as if it is falling apart.

One effect already of Sunday’s filing is that Purdue will not have to face the first federal trial over the opioid crisis after the judge overseeing the case removed the company as a defendant on Monday.

The trial is scheduled to start next month in Cleveland. The remaining defendants will be a group of drugmakers, distributors and a pharmacy.

Shaun Wallace, 40, who co-owns three “sober homes” in Worcester, Massachusetts, said he has been in recovery five years from an opioid addiction that started with OxyContin. He said he supports Massachusetts Attorney General Maura Healey’s decision to continue pursuing the company.

“They were pretty much giving us minor-league heroin and saying it was safe,” he said. “There should be more consequences for that family. Your average drug dealer gets in way more trouble than this family that’s just taken out a whole generation of our people.”

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Nation-World

FILE - Britain's Queen Elizabeth II looks on during a visit to officially open the new building at Thames Hospice, Maidenhead, England July 15, 2022. Buckingham Palace says Queen Elizabeth II is under medical supervision as doctors are “concerned for Her Majesty’s health.” The announcement comes a day after the 96-year-old monarch canceled a meeting of her Privy Council and was told to rest. (Kirsty O'Connor/Pool Photo via AP, File)
Queen Elizabeth II dead at 96 after 70 years on the throne

Britain’s longest-reigning monarch and a rock of stability across much of a turbulent century died Thursday.

A woman reacts as she prepares to leave an area for relatives of the passengers aboard China Eastern's flight MU5735 at the Guangzhou Baiyun International Airport, Tuesday, March 22, 2022, in Guangzhou. No survivors have been found as rescuers on Tuesday searched the scattered wreckage of a China Eastern plane carrying 132 people that crashed a day earlier on a wooded mountainside in China's worst air disaster in more than a decade. (AP Photo/Ng Han Guan)
No survivors found in crash of Boeing 737 in China

What caused the plane to drop out of the sky shortly before it was to being its descent remained a mystery.

In this photo taken by mobile phone released by Xinhua News Agency, a piece of wreckage of the China Eastern's flight MU5735 are seen after it crashed on the mountain in Tengxian County, south China's Guangxi Zhuang Autonomous Region on Monday, March 21, 2022. A China Eastern Boeing 737-800 with 132 people on board crashed in a remote mountainous area of southern China on Monday, officials said, setting off a forest fire visible from space in the country's worst air disaster in nearly a decade. (Xinhua via AP)
Boeing 737 crashes in southern China with 132 aboard

More than 15 hours after communication was lost with the plane, there was still no word of survivors.

In this photo taken from video provided by the Ukrainian Presidential Press Office, Ukrainian President Volodymyr Zelenskyy speaks to the nation in Kyiv, Ukraine, Sunday, Feb. 27, 2022. Street fighting broke out in Ukraine's second-largest city Sunday and Russian troops put increasing pressure on strategic ports in the country's south following a wave of attacks on airfields and fuel facilities elsewhere that appeared to mark a new phase of Russia's invasion. (Ukrainian Presidential Press Office via AP)
Ukraine wants EU membership, but accession often takes years

President Volodymyr Zelenskyy’s request has enthusiastic support from several member states.

FILE - Ukrainian servicemen walk by fragments of a downed aircraft,  in in Kyiv, Ukraine, Friday, Feb. 25, 2022. The International Criminal Court's prosecutor has put combatants and their commanders on notice that he is monitoring Russia's invasion of Ukraine and has jurisdiction to prosecute war crimes and crimes against humanity. But, at the same time, Prosecutor Karim Khan acknowledges that he cannot investigate the crime of aggression. (AP Photo/Oleksandr Ratushniak, File)
ICC prosecutor to open probe into war crimes in Ukraine

U.N. human rights chief Michelle Bachelet confirmed that 102 civilians have been killed.

FILE - Refugees fleeing conflict from neighboring Ukraine arrive to Zahony, Hungary, Sunday, Feb. 27, 2022. As hundreds of thousands of Ukrainians seek refuge in neighboring countries, cradling children in one arm and clutching belongings in the other, leaders in Poland, Hungary, Bulgaria, Moldova and Romania are offering a hearty welcome. (AP Photo/Anna Szilagyi, File)
Europe welcomes Ukrainian refugees — others, less so

It is a stark difference from treatment given to migrants and refugees from the Middle East and Africa.

Afghan evacuees disembark the plane and board a bus after landing at Skopje International Airport, North Macedonia, on Wednesday, Sept. 15, 2021. North Macedonia has hosted another group of 44 Afghan evacuees on Wednesday where they will be sheltered temporarily till their transfer to final destinations. (AP Photo/Boris Grdanoski)
‘They are safe here.’ Snohomish County welcomes hundreds of Afghans

The county’s welcoming center has been a hub of services and assistance for migrants fleeing Afghanistan since October.

FILE - In this April 15, 2019, file photo, a vendor makes change for a marijuana customer at a cannabis marketplace in Los Angeles. An unwelcome trend is emerging in California, as the nation's most populous state enters its fifth year of broad legal marijuana sales. Industry experts say a growing number of license holders are secretly operating in the illegal market — working both sides of the economy to make ends meet. (AP Photo/Richard Vogel, File)
In California pot market, a hazy line between legal and not

Industry insiders say the practice of working simultaneously in the legal and illicit markets is a financial reality.

19 dead, including 9 children, in NYC apartment fire

More than five dozen people were injured and 13 people were still in critical condition in the hospital.

15 dead after Russian skydiver plane crashes

The L-410, a Czech-made twin-engine turboprop, crashed near the town of Menzelinsk.

FILE - In this March 29, 2018, file photo, the logo for Facebook appears on screens at the Nasdaq MarketSite in New York's Times Square. Facebook prematurely turned off safeguards designed to thwart misinformation and rabble rousing after Joe Biden defeated Donald Trump in the 2020 elections in a moneymaking move that a company whistleblower alleges contributed to the deadly Jan. 6, 2021, invasion of the U.S. Capitol. (AP Photo/Richard Drew, File)
Facebook, WhatsApp, Instagram in hourslong worldwide outage

Something made the social media giant’s routes inaccessable to the rest of the internet.

Oil washed up on Huntington Beach, Calif., on Sunday, Oct. 3, 2021. A major oil spill off the coast of Southern California fouled popular beaches and killed wildlife while crews scrambled Sunday to contain the crude before it spread further into protected wetlands. (AP Photo/Ringo H.W. Chiu)
Crews race to limited damage from California oil spill

At least 126,000 gallons (572,807 liters) of oil spilled into the waters off Orange County.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.