Purdue Pharma filed a Chapter 11 plan of reorganization on Monday, March 15, and a related disclosure statement in the United States Bankruptcy Court for the Southern District of New York. According to the drugmaker, the plan charts a path for more than $10 billion of value, including 100% of Purdue’s assets, to be delivered to claimants and communities across the country affected by the opioid crisis.
The plan will resolve thousands of opioid lawsuits by restructuring Purdue into an entity that would steer profits to plaintiffs and require the company’s owners, the Sackler family, to contribute nearly $4.3 billion (paid out over nine years) to the settlement. The plan will transfer billions of dollars of value into trusts and will dissolve Purdue and transfer its operating assets to a newly formed company with the public-minded mission of addressing the opioid crisis. State and local governments will neither own, nor operate the new company.
Purdue originally filed for bankruptcy in September 2019 when it faced almost 3,000 lawsuits. This plan is meant to serve as its path out of bankruptcy.
The various trusts would be funded with an initial cash infusion of $500 million immediately after the company emerges from bankruptcy and another $1 billion generated from the new entity’s assets and operations through 2024. This new entity will be overseen by a board comprising independent managers selected by states and local governments in consultation with Purdue.
Read the Purdue Pharma statement