Purdue Pharma has filed a new bankruptcy plan as part of a $7.4 billion settlement to resolve thousands of lawsuits over the company's alleged role in the opioid crisis, months after the Supreme Court blocked a prior deal.
The bankrupt company announced Tuesday it had filed a Chapter 11 Plan of Reorganization in the U.S. Bankruptcy Court for the Southern District of New York.
In June of last year, the Supreme Court blocked a settlement deal, finding that the Sackler family who previously controlled Purdue Pharma could not be released from liability under federal law, despite contributing $6 billion to the settlement.
“Following the 2024 Supreme Court ruling, we doubled down on our commitment to work with our creditors to design a new Plan that delivers unprecedented value to those affected by the opioid crisis. Today’s filing is a major milestone in that effort,” Purdue Board Chair Steve Miller said in a statement.
"We and our creditors have worked tirelessly in mediation to build consensus and negotiate a settlement that will increase the total value provided to victims and communities, put billions of dollars to work on day one, and serve the public good," Miller added. "I sincerely thank our stakeholders for their dedication and collaboration, and I look forward to having the plan confirmed and consummated as quickly as possible.”
In January, Purdue Pharma and the Sacklers agreed in principle to pay a $7.4 billion settlement to resolve the multitude of lawsuits, raising the settlement by an additional $1.4 billion. Tuesday's court filing expands on this plan.
Purdue Pharma argued this reorganization is likely to succeed, writing, "The Debtors’ reorganization is plainly in the public interest and favored by a balancing of the harms. The Debtors’ proposed plan will devote billions of dollars to public opioid abatement and creditor recoveries."
