Purdue Pharma may appeal Reuters’ rejection of the bankruptcy plan

Purdue Pharma may appeal Reuters’ rejection of the bankruptcy plan

© Reuters. FILE PHOTO: Pharmacist Holds a Bottle of OxyContin by Purdue Pharma at a Pharmacy in Provo, Utah, USA, May 9, 2019 REUTERS / George Frey

Authors: Maria Chutchian and Jonathan Stempel

NEW YORK (Reuters) – A U.S. judge on Friday allowed Purdue Pharma to immediately challenge her denial of legal protection to members of the Sackler family who own OxyContin, which were a major component of her bankruptcy reorganization plan.

U.S. District Judge Colleen McMahon’s verdict means Purdue will have another chance to keep the $ 4.5 billion opioid lawsuit intact at the heart of the company’s plan. She gave Purdue until Jan. 17 to appeal to the Second District Court of Appeals of the United States, based in New York.

McMahon annulled the bankruptcy judge’s order approving the deal in December. The settlement envisions so-called debtor exemptions that protect Sacklers from future opioid lawsuits.

In Friday’s verdict, McMahon said the appeal should be resolved quickly “given the urgency of the opioid crisis and the importance of the issue in resolving the case.”

Purdue filed for bankruptcy in 2019, facing thousands of lawsuits accusing her and Sacklers of inciting the opioid epidemic through bogus marketing.

The Sacklers, who denied the wrongdoing, gave $ 4.5 billion in settlements in exchange for the release. Under Purdue’s reorganization plan, the settlement funds would be directed to opioid reduction programs.

The lawyer of several states that opposed the quick appeal did not immediately respond to the request for comment, as did the representatives of the Sackler family. Purdue did not immediately comment.

As the appeal goes through the courts, Purdue and Sackler mediate with states that opposed the release with a view to reaching a new agreement that, if reached, would likely nullify the ongoing appeal.

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