Purdue Pharma to ask judge to extend legal shield for Sacklers

[February 17, 2022]  By Tom Hals and Dietrich Knauth

(Reuters) - Purdue Pharma will ask a bankruptcy judge on Thursday to extend a legal shield that prevents opioid lawsuits from going forward against some members of the wealthy Sackler family who own the OxyContin maker.

The hearing before Judge Robert Drain in White Plains, New York, comes as the Sacklers try to reach a deal with eight states and the District of Columbia to resolve litigation alleging they fueled the opioid epidemic.

The legal shield protecting the Sacklers has been in place while the parties try to work out a deal.

An agreement could clear the path for the company to exit bankruptcy and distribute billions of dollars to governments hard hit by the addiction crisis.
 

A previous $4.33 billion settlement was rejected in December on appeal by a U.S. District judge in Manhattan.

Purdue filed for bankruptcy in 2019 in the face of thousands of lawsuits accusing it and Sackler family members of helping cause the U.S. opioid epidemic through deceptive marketing that played down addiction and overdose risks.

A pharmacist holds prescription painkiller OxyContin, 40mg pills, made by Purdue Pharma L.D. at a local pharmacy, in Provo, Utah, U.S., April 25, 2017. REUTERS/George Frey/File Photo

The company pleaded guilty to misbranding and fraud charges related to its marketing of OxyContin in 2007 and 2020. The Sacklers have denied wrongdoing.

U.S. Bankruptcy Judge Shelley Chapman, who is mediating talks between the Sacklers and the attorneys general, said in court filings in recent weeks that the parties were close to an agreement and the Sacklers would make a "substantial" additional contribution beyond the $4.33 billion proposed in the original bankruptcy exit plan.

The current round of mediation includes representatives for the Raymond Sackler and Mortimer Sackler branches of the Sackler family, as well as eight states including California, Connecticut and Washington.

(Reporting by Tom Hals in Wilmington, Delaware and Dietrich Knauth in New York; Editing by Noeleen Walder, Stephen Coates and David Evans)

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