Billion-Dollar Opioid Bankruptcy: Purdue Pharma Files for Chapter 11 as Part of Settlement
Purdue Pharma, which made $ 3 billion selling drugs such as the opioid oxycontin in 2017 alone, will file for bankruptcy under a possible settlement that covers hundreds of lawsuits against the company. The announcement also comes on allegations that the Sackler family – who own Purdue – used Swiss bank accounts to transfer $ 1 billion from the company to private accounts to avoid court seizures.
What does the settlement and filing for bankruptcy mean for people who have complained of opioid addiction or death?
Overcoming the crisis
“This unique framework for a comprehensive solution will bring all of Purdue’s assets and resources to the benefit of the American public,” said Steve Miller, Chairman of the Purdue Board of Directors. “This comparison framework avoids wasting hundreds of millions of dollars and years on protracted litigation. Instead, communities across the country trying to deal with the opioid crisis are being given billions of dollars and critical resources. We will continue to do so Attorneys General and Prosecutors work together. ” other plaintiff representatives to complete and implement this agreement as soon as possible. “
If it just could be that easy. While Purdue has agreed to raise more than $ 10 billion to address the opioid crisis and settle claims from 24 attorneys general, five U.S. territories, and certain plaintiffs from hundreds of other lawsuits, several states have declined to sign the deal and plan before it To challenge court. It is estimated that Purdue is facing a total of 2,600 lawsuits.
Follow the money
How can claimants get money from a bankrupt company? Purdue is filed under Chapter 11, which avoids liquidation of assets and allows a company to keep business operations going and pay off its debts over time. (Liquidation is possible under Chapter 11 but not guaranteed as in Chapter 7 Bankruptcy Proceedings.) Purdue will therefore not exactly cease its opioid operations or other drug sales in the near future.
Still, his bankruptcy plan could face similar obstacles as his statutory settlement agreement. Any reorganization plan under Chapter 11 requires approval: Creditors who hold at least two-thirds of the total debt and more than half of the total number of claims must approve the plan. So there is no guarantee that most creditors will opt out of Purdue, and some of those creditors may be in favor of liquidation if they think it means they are more likely to be repaid.
And the money trail can complicate matters too. According to court records, members of the Sackler family received more than $ 4 billion from Purdue from 2007 to 2018, according to the AP, and most of the assets are believed to be held outside of the United States
If you are making or considering an opioid-related legal claim, reach out to a skilled personal injury attorney to find out how the settlement and bankruptcy could affect your case.