Purdue Pharma on Tuesday asked a U.S. bankruptcy judge to put a 60-day halt on lawsuits against its owners, members of the wealthy Sackler family, in its first court appearance since a landmark Supreme Court ruling struck down its bankruptcy settlement.
Purdue lawyer Marshall Huebner said at a court hearing in White Plains, New York, that the litigation ceasefire would make possible “a high-speed, high-stakes mediation” as Purdue seeks to renegotiate a sweeping settlement of lawsuits against the Sacklers and the company that allege its painkiller OxyContin fueled the U.S. opioid addiction crisis.
The US Supreme Court ruled on June 27 that Purdue Pharma's bankruptcy settlement cannot provide protection to the Sacklers, who did not file for bankruptcy themselves, for their role in the country's deadly opioid epidemic.
The decision forced Purdue to restart after nearly five years in bankruptcy, and jeopardized billions of dollars in funding that the company and the Sacklers had pledged to combat the damage of the U.S. opioid epidemic.
Purdue's bankruptcy has prevented opioid lawsuits from proceeding against the Stamford, Connecticut-based drugmaker since 2019, and Purdue has extended that legal protection to the Sacklers as well.
Huebner told U.S. Bankruptcy Judge Sean Lane that protecting the Sacklers for a “modest” 60-day negotiation period would give Purdue the best chance to negotiate a new bankruptcy agreement and preserve “as much as possible” of its previous deal.
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Huebner said Purdue wants to move quickly to reach an agreement that would put the money toward preventing opioid overdoses and treating addiction.
“Every day of delay is coming at a tragic, tragic cost,” Huebner said.
Purdue also asked Lane to appoint two mediators to assist in settlement talks.
The proposed mediators are retired bankruptcy judge Shelly Chapman, who brokered a previous deal under which the Sacklers agreed to pay up to $6 billion to settle opioid lawsuits, and arbitrator Eric Green.
If mediation fails, Purdue has said a court-appointed committee representing its creditors should be allowed to sue the Sacklers because the Sacklers siphoned more than $11 billion from the company and because their conduct makes Purdue liable for other lawsuits.
The Sacklers have said the lenders' proposed lawsuit is prejudicial and based on “factual errors.”
Lawsuits filed against Purdue and members of the Sackler family by state and local governments, as well as individual plaintiffs, accuse them of fueling the opioid epidemic through deceptive marketing of their painkiller. The company pleaded guilty in 2007 and 2020 to charges of misbranding and fraud related to the marketing of OxyContin.
Purdue and members of the Sackler family have expressed hope that a new settlement can be reached following the Supreme Court's decision. The previous settlement was supported by the attorneys general of all 50 states, as well as a large majority of local governments and individual opioid victims who voted on it.
Members of the Sackler family have denied any wrongdoing but have expressed regret that OxyContin “unexpectedly became part of the opioid crisis.”
(Reporting by Dietrich Noth; Editing by Alexia Garamfalvi and Bill Berkrot)
