Sackler strengthens Purdue opioid lawsuit settlement offer with new terms

Seven months after the Supreme Court struck down an agreement to resolve thousands of opioid lawsuits against Purdue Pharma, members of the company's owner, the Sackler family, have increased their cash offer to settle the cases, but… There was a new pitfall.

Under the framework of the new contract, the Sacklers would not be immune from future opioid lawsuits, a condition they had long insisted on, but which courts ruled unacceptable.

In exchange, it will pay up to $6.5 billion ($500 million more than the previous agreement), but with new conditions. Claimants, including states, local governments and individuals, would have to put up to $800 million into accounts similar to statutory accounts. A defense fund for billionaires to fight such lawsuits, according to people familiar with the negotiations.

Some details of the framework were announced Thursday by New York Attorney General Letitia James, but not the legal defense fund. He said the total settlement is $7.4 billion, including $897 million from Purdue.

New York state could receive up to $250 million, she said.

“The Sacklers played a key role in creating and accelerating the opioid epidemic through their ruthless pursuit of profit at the expense of vulnerable patients,” James said.

If the deal goes through, the Sacklers “will no longer have control of Purdue and will never be allowed to sell opioids in the United States again,” she added.

Similar to other settlements in opioid litigation nationwide, these payments are intended to fund addiction prevention and treatment efforts in hard-hit communities across the country.

“I am very pleased to have reached a new agreement that will provide billions of dollars to compensate victims, alleviate the opioid crisis, and provide lifesaving treatments and overdose rescue drugs,” said Perdue. said in a statement, noting that a reorganization had taken place. The plan was still in progress.

The Sacklers did not respond to requests for comment.

It's unclear how many plaintiffs will agree to the new terms. James noted that 14 other states are also participating in the negotiations: Florida, Connecticut, Massachusetts, Tennessee, California, Colorado, Illinois, Delaware, Pennsylvania, Oregon, Texas, Vermont, Virginia, and West Virginia. .

However, this agreement must now be sold to all claimants. It would need to be sold to hundreds of American Indian tribes and about 140,000 personal injury victims, as well as the remaining states and thousands of local governments.

Many of those who accepted the deal find the Sacklers reserves a hard pill to swallow, but despite years of litigation piling up at Purdue, claimants still have The reality is that not a single dollar has been transferred and we are suffering immediate and ongoing damage. About the opioid crisis. In recent months, there has been an urgent need to close new deals so the money can finally start flowing. Under the latest terms, opponents of the deal are free to file new lawsuits against the Sacklers. Under the previous settlement, they were prohibited from doing so.

In fact, legal reserves for the Sacklers could be depleted quickly. Lawsuits against the Sacklers have already been threatened by a handful of states, counties, cities and individuals.

A spokesperson for Washington state, which has successfully gone after other drug companies rather than sign a national deal, said the state is considering its options.

States that pay most of the money into the reserve fund would be required to keep a minimum of $200 million in the account, with total contributions capped at $800 million. After five years, unused funds will begin to return to the state.

The final calculation of how much of Purdue's deal total will be deducted to pay for attorneys, consultants and management fees is still being discussed.

The Sacklers will pay nearly $3 billion over the first three years and the rest over 12 more years.

If the plan is approved by the plaintiffs, the U.S. Trustee, the division of the Department of Justice that oversees the bankruptcy system, and a federal bankruptcy judge, Purdue would emerge from bankruptcy, where it has been since 2019, by the end of this year. . We will immediately pay out $897 million in our own cash to the parties who signed the transaction.

At that point, the 15 years of Sackler payments will also begin. And while most of the lawsuits that began more than a decade ago have ultimately degenerated into ungainly bond lawsuits brought by cities, states, tribes, hospitals, and individual victims and argued by countless teams of lawyers. , will probably end.

In the plan, which was rejected by the Supreme Court, the Sacklers, who have long been portrayed in movies, TV and news articles as the public faces of the predatory opioid manufacturer, asked for a guaranteed $6 billion in funding. It sought a ban on any current or future litigation against them in this regard. To Purdue and opioids.

Purdue itself has that protection as a standard benefit given to businesses as they emerge from bankruptcy. But because the Sacklers did not personally file for bankruptcy, the Supreme Court ruled in June that granting them permanent civil discharge was outside the scope of bankruptcy law.

The purpose of the statutory reserve is essentially a payment made by claimants to protect the Sacklers from other claimants and to satisfy court judgments.

“If states are expected to fund the Sackler family's legal defense, plaintiffs and the public want to hear more about the impact of that money going to the Sackler family and their lawyers rather than reducing opioids. ” said Melissa B. Jacoby. Bankruptcy expert at the University of North Carolina School of Law.