As if partaking in the powerful drug it aggressively marketed, being at the forefront of the opioid boom was a dizzying high for Purdue Pharma. But it ultimately proved crippling for the manufacturer of OxyContin.
On Tuesday, the company revealed that its bankruptcy plan has received “overwhelming support.” The move will allow Purdue to settle thousands of lawsuits it faced over its role in helping trigger and fuel the opioid crisis.
Among nearly 5,000 state and local creditors, 97% voted to accept the chapter 11 reorganization plan. A confirmation hearing is set for Aug. 9.
RELATED: OxyContin maker Purdue wins 15 states’ support in controversial $4B bankruptcy plan
“This is an unprecedented expression of support for a restructuring of this size and complexity, in favor of a plan that will provide needed resources to those affected by the opioid crisis,” Purdue Pharma CEO Steve Miller said in a release.
The vote came less than three weeks after 15 states signed off on Purdue’s controversial plan, which would transform the company into a nonprofit in exchange for excusing it from future litigation. Purdue’s owners, the Sackler family, would agree to settle for $4.5 billion to be paid over nine years, said the New York Times.
According to the House Committee on Oversight and Reform, which has been investigating Purdue’s role in the opioid crisis, the combined assets of the family are $11 billion. The committee estimated that opioid sales generated roughly $30 billion in revenue for Purdue.
RELATED: Purdue reaches $8B settlement on federal opioid charges—but will it ever pay that amount?
There is considerable government pushback for the plan. On Monday, in Purdue’s home state of Connecticut, Sen. Richard Blumenthal (D) and attorney general William Tong voiced support for closing the loophole that allows large companies to declare bankruptcy to sidestep litigation. Tong will testify before a House Judiciary subcommittee on the issue this week.
Last week, Reuters reported that Johnson & Johnson is also considering a bankruptcy plan, which would entail establishing a new company in which to funnel lawsuits over its talcum products and then declaring it bankrupt.
Also last week, J&J and three distributors agreed to a landmark opioid settlement which resolved lawsuits for $26 billion.
Purdue has spent years in court battling opioid lawsuits. In October of 2020, it settled with the Justice Department for more than $8 billion to plead guilty and settle federal criminal and civil claims linked to its OxyContin actions.