Purdue Pharma LP filed for Chapter 11 bankruptcy protection late Sunday as the OxyContin maker looked to isolate the impact of thousands of lawsuits linked to the nation's opioid crisis.
Purdue Pharma also said it has reached a tentative agreement to settle lawsuits brought by attorneys general in 24 U.S. states, and well as similar actions filed by legal counsels in 2,000 cites and counties around the country that it estimates will "provide more than $10 billion of value to address the opioid crisis." Purdue filed its plea for Chapter 11 bankruptcy at the U.S. District Court in White Plains, New York.
"This unique framework for a comprehensive resolution will dedicate all of the assets and resources of Purdue for the benefit of the American public," said chairman Steve Miller. "This settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation, and instead will provide billions of dollars and critical resources to communities across the country trying to cope with the opioid crisis."
"We will continue to work with state attorneys general and other plaintiff representatives to finalize and implement this agreement as quickly as possible," Miller added.
Dozens of other U.S. states, however, as well as many other private and public plantiffs, have declined to participate in the proposed settlement, leaving Purdue and its controlling Sackler family liable for billions more in judgements should the various suits, linked to the breadth and depth of the opioid crisis, eventually succeed.
Some of the suits claim both Purdue and the Sackler family knowingly mislead doctors and patients with respect to the risks associated with OxyContin, allegations both have strenuously denied. At least three states -- New York, Massachusetts and Connecticut -- want the Sackler family to increase its $4.5 billion contribution to the proposed settlement, a figure that largely matches Purdue's opioid sales over the past decade.
Last week, New York Attorney General Letitia James accused the Sacklers of using Swiss bank accounts to funnel around $1 billion in payments from Purdue to themselves, and have taken more than $4 billion from the company over the past 12 years to avoid paying legal claims.
"While the Sacklers continue to lowball victims and skirt a responsible settlement, we refuse to allow the family to misuse the courts in an effort to shield their financial misconduct", James said in a statement Friday. "The limited number of documents provided to us so far underscore the necessity for compliance with every subpoena."