Purdue’s $8.34 billion opioid settlement with DOJ draws objections

By Sarah Lizee

Olympia, Wash., Nov. 12 – Purdue Pharma, LP’s proposed $8.34 billion opioid settlement with the U.S. Department of Justice drew a number of objections Tuesday, including from an informal group of non-consenting states and an informal committee on accountability.

“If approved now, the proposed settlements would straitjacket the parties just as they are addressing the complex questions surrounding the future of Purdue, and it would allow Purdue and the [Sackler family] to rebrand Purdue as an agent of ‘public trust,’ a narrative they have advocated from well before these Chapter 11 cases commenced,” the group of non-consenting states said in their objection.

The group also stated that under the proposed settlements, if the non-federal public and private creditors do not agree to certain terms of the settlement, those creditors risk losing any recovery.

Approval of the proposed settlements would also shut down any ongoing efforts to advance a private buyer alternative for Purdue’s businesses with the debtors, the unsecured creditors’ committee and others, the non-consenting states added.

“Purdue’s fate should be determined by its stakeholders through the collective negotiation process and confirmation of a plan of reorganization,” the group said. “Neither Purdue nor the federal government should be permitted to impose that result without full and fair negotiations, disclosures and a reorganization plan, and the exploration of private sale alternatives.”

Meanwhile, the accountability committee said in their objection that the settlement would improperly allow Purdue and a single creditor to “make a harmful decision about the future of the opioid business in America” before parties to the bankruptcy can negotiate a plan.

“A transaction that effects a lock-up of the terms of a Chapter 11 bankruptcy plan is not permitted,” the group said.

“Purdue is seeking to use its motion to obtain a court ruling, as soon as next week, that would interfere with the creditors’ ability to negotiate a final plan.”

A hearing on approval of the settlement is scheduled for Nov. 17.

Purdue Pharma is a Stamford, Conn.-based drug manufacturer. It filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York on Sept. 15, 2019 under case number 19-23649.

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