Purdue Pharma gained court docket approval to exit chapter, capping six years of authorized wrangling over a multibillion-dollar settlement and legal responsibility releases for the opioid producer’s Sackler household homeowners.
Decide Sean H. Lane mentioned he’ll log off on Purdue’s Chapter 11 plan throughout a listening to Friday within the U.S. Chapter Court docket for the Southern District of New York. The plan contemplates an estimated $7.4 billion in funds to deal with nationwide hurt brought on by the mass advertising and marketing and manufacturing of addictive painkillers.
The decide will difficulty his full, detailed ruling in court docket subsequent week.
The plan was negotiated for greater than a 12 months following the U.S. Supreme Court docket’s June 2024 resolution overturning a previous iteration that offered a blanket authorized legal responsibility defend in favor of the Sackler household for paying as much as $6 billion in settlement contributions.
That blockbuster ruling, which barred releases for non-bankrupt third events that don’t have creditor consent in all Chapter 11 circumstances, has reshaped how giant company chapter plans are formulated.
Below the revised deal, the Sacklers will contribute roughly $6.5 billion in settlement installments over 15 years, topic to sure reserves. In accordance with the Supreme Court docket’s holdings, collectors have been given the chance to decide out of releasing claims in opposition to the Sackler household in change for a smaller settlement distribution.
Settlement funds will largely be used to boost nationwide opioid abatement efforts, whereas roughly $850 million might be used to compensate people and households with addiction-related claims.
Moreover, Purdue will switch its enterprise belongings to a public profit firm referred to as Knoa Pharma that can develop and distribute opioid overdose reversal and habit therapy medicines.
Over 99% of voting collectors supported the up to date settlement plan, spanning all U.S. states and territories, together with teams of native authorities entities, hospitals and medical professionals, faculties, tribes, and people with private damage claims.
The one objections litigated over the course of a three-day trial had been these raised by a small variety of people representing themselves, a lot of whom raised considerations over how a lot aid is being afforded to the Sacklers.
At trial, Lane repeatedly defined that the revised plan doesn’t power anybody to settle claims in opposition to Purdue’s homeowners and that chapter proceedings don’t relieve any events of felony legal responsibility.
Purdue legal professional Marshall Huebner of the Davis Polk & Wardwell LLP, in closing arguments Friday, acknowledged that the plan may by no means totally deal with the ache that so many individuals have suffered from opioid habit and overdose, however mentioned it’s one of the best consequence accessible “to close the overly long chapter on this situation and let the money flow.”
“No party is buying immunity in these proceedings and no party is buying their own form of justice,” he added.
Purdue filed for chapter in 2019 going through greater than 2,600 opioid habit lawsuits associated to its manufacturing and sale of OxyContin, which has been blamed for fueling a multi-decade disaster within the US. The chapter proceedings elicited greater than $40 trillion in creditor claims in opposition to the corporate.
The corporate in 2020 pleaded responsible to federal conspiracy and fraud costs associated to its enterprise practices.
The case is Purdue Pharma LP, Bankr. S.D.N.Y., No. 19-23649, listening to Nov. 14, 2025.
