Business insurance

Sacklers close to deal to increase opioid settlement in Purdue bankruptcy

(Reuters) – Members of the Sackler family, owners of Purdue Pharma LP, are nearing a deal to bolster their more than $4 billion bid to resolve sprawling opioid lawsuits after negotiating with the states that had objected to the terms of the OxyContin manufacturer’s bankruptcy reorganization, according to a court filing.

Sackler family members and states opposing Purdue’s bankruptcy reorganization terms are ‘close to an agreement in principle’ to provide additional cash beyond the $4.325 billion they had promised to settle the opioid dispute, according to a mediator’s interim report filed Monday.

A deal involving members of the Sackler family and multiple state attorneys general could potentially end a legal challenge that kept Purdue from emerging from bankruptcy and pave the way for a plan to help ease the opioid crisis.

Mediation began in January between members of the Sackler family and several states after a U.S. district judge overturned the original settlement, which was the cornerstone of Purdue’s bankruptcy reorganization plan.

The judge found that the reorganization plan inadequately protected members of the Sackler family, who had not themselves filed for Chapter 11, from opioid litigation.

The mediator, US Bankruptcy Judge Shelley Chapman, said any additional contributions from the Sacklers would be solely for opioid reduction. She asked that the talks be extended until February 7, a request that could be considered at a hearing in bankruptcy court on Tuesday.

The report describes marathon negotiation sessions held on January 25 and 26 in New York that lasted more than 12 hours a day and involved two unidentified attorneys general who participated in person and another who joined Zoom.

The settlement agreement had been opposed by at least eight state attorneys general, including Bob Ferguson in Washington state and William Tong in Connecticut.

Purdue, the maker of the highly addictive opioid painkiller OxyContin, filed for bankruptcy in 2019 in the face of thousands of lawsuits accusing it and the Sacklers of fueling the opioid epidemic in the United States through deceptive marketing. The opioid abuse crisis has resulted in nearly 500,000 overdose deaths in two decades, according to US data.

Members of the Sackler family have denied any wrongdoing. Purdue pleaded guilty in November 2020 to three felonies stemming from its handling of OxyContin.

Several members of the Sackler family testified in Purdue’s bankruptcy trial that their contribution to the settlement was conditional on achieving “world peace” over an opioid litigation.