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 On Wednesday, lead lawyers representing more than 2,000 cities,
counties and other plaintiffs suing Purdue, along with 23 states and
three U.S. territories, were on board with an offer from the company
and its controlling Sackler family to settle lawsuits in a deal
valued at up to $12 billion, the people said.
More than a dozen other states remain opposed or uncommitted to the
deal, setting the stage for a legal battle over Purdue's efforts to
contain the litigation in bankruptcy court, they said.
States on Wednesday updated a federal judge on the settlement
offer's support, which could evolve as the day progresses, the
people said.
Purdue's board is scheduled to be briefed on settlement progress on
Thursday, one of the people said. There remained a chance
negotiations could fall apart and the company's plans, including
timing of a bankruptcy filing, could change, the person said.
Reuters earlier on Wednesday reported that Purdue was nearing a
settlement with cities and many states.
The Sacklers, well-known wealthy philanthropists, have declined to
revise their proposed settlement contribution of $3 billion over
seven years and another $1.5 billion or more through eventual sale
of another business they own called Mundipharma, several people
familiar with the matter said.
New York, Massachusetts and Connecticut, where privately-held Purdue
is based, are among states opposed to the current offer and have
pushed the family to guarantee $4.5 billion, the people said.
Last weekend, the Sacklers "refused to budge" after attorneys
general in North Carolina and Tennessee presented them with
counterproposals they said had widespread support from other states,
according to correspondence reviewed by Reuters.
The lawsuits, some of which target the Sacklers as well as Purdue,
claim the family and company contributed to a public health crisis
that has claimed the lives of nearly 400,000 people between 1999 and
2017, according to the latest U.S. data.
The suits allege Purdue aggressively marketed prescription
painkillers while misleading doctors and patients about their
addiction and overdose risks. Purdue and the Sacklers have denied
the allegations.
FAMILY CONTRIBUTION A STICKING POINT
With negotiations over the family's contribution to a settlement at
loggerheads, Purdue is preparing to file for bankruptcy protection
as soon as this weekend or next with the outlines of a settlement in
hand, the people said.
Purdue would then ask a U.S. bankruptcy judge to halt litigation
while settlement discussions continue, a move some states said they
are likely to challenge https://www.reuters.com/article/us-opioids-litigation-bankruptcy-focus/fate-of-opioid-litigation-hinges-on-government-police-power-idUSKCN1TR16C.
A bankruptcy judge could force holdouts to accept a settlement as
part of Purdue's reorganization plan if enough other plaintiffs
agree.
"Purdue Pharma continues to work with all plaintiffs on reaching a
comprehensive resolution to its opioid litigation that will deliver
billions of dollars and vital opioid overdose rescue medicines to
communities across the country impacted by the opioid crisis," the
company said in a statement.
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Members of the Sackler family targeted in lawsuits said in a
statement that they support "working toward a global resolution that
directs resources to the patients, families and communities across
the country who are suffering and need assistance" as opposed to
engaging in what they described as "endless litigation."
With Purdue facing more than 2,000 opioid-related lawsuits, Reuters
reported in March that the company and the Sacklers began exploring
bankruptcy options to halt litigation and attempt to come to a
far-reaching settlement.
One reason Purdue is eyeing a bankruptcy filing soon is to avoid an
Oct. 21 trial, the people said. That trial, stemming from widespread
lawsuits consolidated in an Ohio federal court, risks a verdict with
outsize damages Purdue could not withstand, one of the people said.
Lead lawyers for the cities and counties suing Purdue in the Ohio
proceedings said they recommended the plaintiffs continue
negotiating a final settlement based on parameters of the current
proposal.
The Tennessee attorney's general's office said it had agreed to the
offer's framework, calling it "the most significant step to date in
a multi-year investigation and negotiation to obtain meaningful
relief to address the opioid addiction crisis."
Purdue's current proposal would use bankruptcy proceedings to
transform into a public trust with a board selected by
court-appointed trustees, the people said. The trust would donate
drugs the company developed to combat opioid abuse to U.S.
communities, which Purdue values at $4.45 billion over 10 years.
The Sacklers, who amassed a multibillion-dollar fortune from
OxyContin sales, would cede control of Purdue, they said.
A Chapter 11 filing with a deal many states oppose risks triggering
more litigation and longer, more expensive bankruptcy proceedings
that could reduce payouts to plaintiffs unless a broader deal is
reached.
"I remain steadfast in my view that the Sacklers have to give back
the money they took from selling opioids so that we can put it
toward solving the problem they created," Connecticut Attorney
General William Tong said in a statement. "The current proposal does
not do that."
The Sacklers have rebuffed requests from some plaintiffs for more
details on the family's finances, some of the people said.
North Carolina Attorney General Josh Stein said he was preparing to
follow other state officials and sue the Sacklers.
“A large number of states are committed to the notion that the
Sacklers need to guarantee more money," he said.
(Reporting by Mike Spector and Jessica DiNapoli; Editing by Bill
Berkrot)
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