Sacklers has to pay $ 4.3 billion for Purdue Pharma’s offer

Purdue Pharma on Monday filed a bankruptcy plan that would settle thousands of opioid lawsuits by restructuring the Oxycopt manufacturer into a unit that would reduce plaintiffs’ profits and require the company’s Sackler family owners to contribute approximately $ 4.3 billion for settlement .

The plan is intended to serve as a way out of Purdue’s bankruptcy, which it filed in September 2019 in front of nearly 3,000 lawsuits accusing the company of alleviating the national opioid crisis through deceptive marketing .

The plan, which Purdue says amounts to more than $ 10 billion, establishes trusts that will indirectly control the new entity to distribute money to states, local governments and tribal organizations for indirect elimination programs.

Sacklers’ contribution will be paid over nine years.

Purdue board president Steve Miller said in a statement, “With drug overdoses still at record levels, it’s time to put Purdue’s assets in jeopardy.” “We believe this plan achieves that important goal.”

The plan also establishes trusts to pay private entities and individuals who have brought opioid-related lawsuits against Purdue, such as hospitals, insurance carriers, and legal guardians of drug-addicted children.

The various trusts will be funded shortly after the company emerged from bankruptcy and through 2024 with an initial cash infusion of another $ 1 billion generated from the assets and operations of the new entity. The trusts will also receive funds from Sacklers’ contribution. The company also expects contributions from insurance policies.

Purdue Pharma's OxyCopt bottles.
The trusts will indirectly control the new entity to distribute money to state and local governments for hate programs.
Bloomberg via Getty Image

The board of the new entity will consist of independent managers selected by states and local governments in consultation with Purdue and its unsecured creditors’ committee. Sacklers will not be part of that selection process.

Purdue said the new entity would not promote opioid products to healthcare providers.

Additionally, the plan will create a publicly available repository for documents related to the government’s investigation into alleged misconduct in the marketing of opioids, which will become available after the plan is approved in bankruptcy court.

Purdue initially had support from about half of the states and other governmental entities for its proposed settlement. Several other states have opposed Purdue’s plan, raising the issue of a system of public trust and an initial $ 3 billion contribution from Sacklers, which he said should be larger.

“Boller became a billionaire due to a national tragedy. Now they are trying to get away from it. “We are going to fight for the accountability that all families in this country deserve.”

The plan should receive approval from US Bankruptcy Judge Robert Drain in White Plains, NY.

The Sacklers have also agreed to pay $ 225 million to settle a civil investigation from the Department of Justice. He has not been charged with criminal charges.

Purdue Pharma Headquarters in Stamford, Conn.
The plan aims to pull Purdue’s roadmap out of bankruptcy.
Getty Images

Members of the Sackler family said in a statement, “Today is an important step towards providing assistance to those who suffer from drug addiction, and we hope this proposed resolution will begin the effort to deliver aid.” .

Purdue himself struck a deal with the Justice Department to pay $ 225 million for a $ 2 billion criminal confiscation. The Justice Department agreed to withdraw the rest if the company developed a restructuring plant that would establish a public benefit company or similar entity that would dedicate the remaining $ 1.775 billion to communities struggling with the opioid crisis.

According to the Centers for Disease Control and Prevention, the crisis of opioid abuse and addiction has claimed the lives of about 450,000 people in the US between 1999 and 2018.

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