Purdue Pharma can appeal rejection of bankruptcy plan
Reuters
Published Jan 07, 2022 01:16PM ET
Updated Jan 07, 2022 04:01PM ET
By Maria Chutchian and Jonathan Stempel
NEW YORK (Reuters) - A U.S. judge on Friday allowed Purdue Pharma to immediately challenge her rejection of legal protections for Sackler family members who own the OxyContin maker, and which were a major component of its bankruptcy reorganization plan.
U.S. District Judge Colleen McMahon's ruling means Purdue will have another shot at keeping intact a $4.5 billion opioid litigation settlement at the heart of the company's plan. She gave Purdue until Jan. 17 to file the appeal to the New York-based 2nd U.S. Circuit Court of Appeals.
McMahon reversed a bankruptcy judge’s order approving the deal in December. The settlement provides so-called nondebtor releases that shield the Sacklers against future opioid-related lawsuits.
Several states and the U.S. Department of Justice’s bankruptcy watchdog opposed the releases, saying the Sacklers should not be afforded such protections since they did not file for bankruptcy themselves.
McMahon said in Friday's ruling that the appeal should be handled quickly "given the urgency of the opioid crisis and the importance of the issue to the resolution of this case."
Purdue filed for bankruptcy in 2019 in the face of thousands of lawsuits accusing it and the Sacklers of fueling the opioid epidemic through deceptive marketing.
The Sacklers, who have denied wrongdoing, contributed the $4.5 billion to the settlement in exchange for the releases. Under Purdue’s reorganization plan, settlement funds would be directed toward opioid abatement programs.
Purdue said in a statement that McMahon's ruling on Friday underscored the need for a speedy resolution to the case.
"At a time when drug overdose deaths are at record levels, using Purdue’s settlement funds for opioid abatement programs and overdose rescue medicines is more needed than ever, so we hope to move as quickly as possible through the appeals process," the company said.
A lawyer for several states that opposed the fast-tracked appeal did not immediately respond to a request for comment. Representatives for the Sacklers declined to comment or did not immediately respond to a request.
While the appeal works its way through the courts, Purdue and the Sacklers are in mediation with the states that opposed the releases with the goal of coming up with a new deal that, if reached, would likely moot the ongoing appeal.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.