The oxycodone manufacturer was sued by states, local governments, and individuals for its alleged role in creating the opioid crisis.
Drugmaker Purdue Pharma filed a new bankruptcy plan on Tuesday, marking a major step towards finalizing a proposed opioid settlement of $7.4 billion.
The maker of the powerful semi-synthetic opioid oxycodone—also marketed as OxyContin and by other names—filed a Chapter 11 reorganization plan and related disclosure statement with the U.S. Bankruptcy Court for the Southern District of New York.
According to a statement announcing the proposal, a new public benefit company “100 percent devoted to improving the lives of Americans,” would be created after Purdue is dissolved, and its assets transferred to the new company.
The Sackler family, which previously owned Purdue Pharma, would “have no ownership interest or role with the new company,” according to the statement, which noted family members have had no involvement in Purdue since the end of 2018.
The new company would have a core mission to abate the opioid crisis and improve public health, including by developing and distributing lifesaving opioid use disorder and overdose rescue medicines for no profit, the statement said.
It would also be run by a board appointed by state governments, the statement added.
Assuming full creditor participation, the plan would see the Sacklers pay out approximately $6.5 billion in installments over the next 15 years—subject to certain reserves—to states, local governments, and individuals harmed by the crisis.
They would pay $1.5 billion on the day the reorganization plan becomes effective and Purdue would contribute 100 percent of its assets, “with an expected $900 million in cash available for distribution on the day of emergence,” according to the statement.
Purdue said it expects widespread creditor support for the deal.
According to the statement, the latest plan “is the only opioid settlement to date that meaningfully compensates individual victims” and, assuming full participation, “individual victims will receive more than $850 million, subject to certain reserves.”
A court hearing to approve the disclosure statement is currently expected to take place in May, according to the statement.
