Seven months after the Supreme Court threw out thousands of opioid cases against Purdue Pharma, members of the company’s owners, the Sackler family, have increased their cash offer for litigation — but with a new catch.
Under the framework of a new deal, the Sicklers would not receive immunity from future opioid lawsuits, a condition they had long insisted on but which the court ruled was not permissible.
Instead, they will pay up to $6.5 billion — $500 million more than the previous deal — but with a new stipulation: Claimants, including states, municipalities and individuals, must allocate a maximum of $800 million to the statutory matching account. -A defense fund for billionaires to fight such cases, according to people familiar with the talks.
Some details of the framework — but not the legal defense fund — were announced Thursday by New York’s attorney general, Letitia James. The total settlement was $7.4 billion, which would include $897 million from Purdue, he said.
New York could get as much as $250 million, he said.
“The Sackler family sought to profit at the expense of vulnerable patients and played a significant role in starting and fueling the opioid epidemic,” Ms. James said.
When the deal is finalized, he added, the Sacklers “will no longer have control of Purdue and will never again be allowed to sell opiates in the United States.”
Echoing other settlements in nationwide opioid litigation, the payments are intended to fund addiction prevention and treatment efforts in hard-hit communities across the country.
It is not clear how many claimants will agree to the new terms. Ms. James noted that 14 other states were involved in the negotiations, including Florida, Connecticut, Massachusetts, Tennessee, California and West Virginia.
But now the deal has to be sold to all claimants — not just the rest of the states and thousands of local governments, but about 140,000 personal injury victims and hundreds of Native American tribes.
Reserve legal fund for Sacklers may run out: Already, new lawsuits against the Sacklers have been threatened by a handful of states, counties, cities and individuals.
A spokesman for Washington state, which has successfully pursued other pharmaceutical companies rather than sign national contracts, said the state is considering its options.
States, which are responsible for the bulk of these payments, must keep at least $200 million in the account, with a total contribution of up to $800 million. After five years, unused funds will begin returning to states.
Final calculations of the total amount to be deducted to pay lawyers, consultants and management fees are still under discussion.
The Sacklers will pay about $3 billion over the first three years, with the remaining payments over an additional 12 years.
If the plan is approved by creditors, an arm of the Justice Department that oversees the bankruptcy system called the U.S. Trustee, and a federal bankruptcy judge, Purdue could file for bankruptcy by the end of this year. will emerge from the one that has kept it safe since 2019. Pay $897 million of your cash immediately to the parties who signed the agreement.
The process is expected to be completed by the end of the year.
At that point, Sackler’s 15-year payments will also begin. And most of the lawsuits that began more than a decade ago — eventually turned into class-action lawsuits brought by cities, states, tribes, hospitals and individual victims, and countless teams of lawyers. Argued by, possibly, will end.
In a plan rejected by the Supreme Court, Sicklers, who have long been portrayed in movies, television and news articles as the public face of predatory opioid manufacturers, sought $6 billion in bail bonds. : That all current and future lawsuits against him related to Purdue and opioids be banned.
Purdue gets that protection as a standard benefit when a company emerges from bankruptcy. But because the Sicklers did not file for bankruptcy personally, the Supreme Court ruled in June that granting them permanent civil immunity was outside the scope of bankruptcy law.
The intent of the legal reserve fund, which, essentially, claimants will pay to defend the Sacklers against other claimants, is to satisfy the court’s judgment.
“If states were expected to contribute funds to the Sacklers’ legal defense, the public would want to hear more about the impact of that money on the Sacklers and their lawyers than on the lack of opioids,” Melissa B. said Jacoby, a bankruptcy expert at the University of North Carolina School of Law.
