Purdue Pharma files for bankruptcy as part of opioid settlement
By Ken Martin | FOXBusiness
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Purdue Pharma, the company that made billions selling the prescription painkiller OxyContin, has filed for bankruptcy in White Plains, New York.
The move comes days after reaching a tentative settlement with many of the state and local governments suing it over the toll of opioids.
The filing was anticipated before and after the tentative deal was struck. The deal could be worth up to $12 billion over time.
Legal battles still lie ahead for Stamford, Connecticut-based Purdue, which is spending millions on legal costs as it defends itself in lawsuits from 2,600 government and other entities.
About half the states have not signed onto the proposal. And several of them plan to object to the settlement in bankruptcy court and to continue litigation in other courts against members of the Sackler family, which owns the company.
The Sackler Family in a statement said they have "deep compassion for the victims of the opioid crisis" and believe the settlement framework "is an historic step toward providing critical resources that address a tragic public health situation."
Objections came over the amount of the deal, which some officials say will not reach close to the $12 billion mark, and because it means the company won't be found liable by a jury or judge.
The company has not admitted wrongdoing and does not intend to.
Key issues that could be decided include whether the suits against the Sacklers in state courts will be able to move ahead, and what will happen to the company itself.
Under the tentative settlement deal, the company would continue to operate, but with profits used to pay for the settlement. Another option could be for a judge to order it be sold.
Court filings assert that members of the Sackler family were paid more than $4 billion by Purdue from 2007 to 2018. Much of the family's fortune is believed to be held outside the U.S., which could complicate lawsuits against the family over opioids.
A court filing by the New York Attorney General's office on Friday contended that Sackler family members used Swiss and other hidden accounts to transfer $1 billion to themselves. The discovery of the transfers bolsters several states' claims that family members worked to shield its wealth because of the growing legal threats against them and Purdue.
The lawsuits assert that the company aggressively sold OxyContin as a drug with a low risk of addiction despite knowing that wasn't true.
Since OxyContin, a time-released opioid, was introduced in 1996, addiction and overdoses have surged. In both 2017 and 2018, opioids were involved in more than 47,000 deaths, according to the U.S. Centers for Disease Control and Prevention.
The Associated Press contributed to this article.
