Purdue Pharma Gets Extension To Finalize Sackler Settlement Deal

On Thursday, Purdue Pharma secured an 18-day extension of a long-standing litigation freeze against its owners, the Sackler family, after persuading a U.S. bankruptcy judge that more time would benefit settlement talks. Judge Sean Lane granted this brief extension during a court session in White Plains, New York, allowing Purdue more time to finalize a broad settlement related to lawsuits that accuse Purdue's painkiller OxyContin of fueling the opioid crisis in the U.S.

The previous settlement agreement was disrupted when the U.S. Supreme Court ruled in June that Purdue Pharma’s bankruptcy settlement could not protect the Sacklers from lawsuits over their involvement in the opioid epidemic, as they did not file for bankruptcy themselves. The Supreme Court determined that bankruptcy courts cannot absolve non-debtors like the Sacklers of legal claims without the approval of those who could pursue such claims.

The ruling forced Purdue Pharma to reevaluate its approach after almost five years in bankruptcy, jeopardizing billions of dollars in funding that the company and the Sackler family had committed to addressing the crisis's damage. On Thursday, Purdue’s attorney, Marshall Huebner, informed Lane that the company aims to retain as much of its original plan as possible. The temporary extension received backing from most U.S. state attorneys general, along with coalitions of counties and local governments with legal claims against Purdue and the Sacklers. Additionally, a court-appointed creditors' committee, which has vowed to take legal action against the Sacklers if mediation fails, supported the extension.

Several governments, including Maryland and Nassau County, New York, criticized the 18-day negotiation period, describing it as a "slippery slope." They highlighted that Purdue has frequently used "short-term" extensions to delay litigation against the Sacklers since the company's bankruptcy began in 2019. Hunter Shkolnik, representing Nassau County, expressed concern, saying, "We’ll keep seeing more requests for extensions. None of the documents submitted have indicated that a resolution is near."

In response, Lane noted that Purdue often remains reticent about the status of negotiations until a deal is finalized. "You never promise a settlement until it's actually settled," Lane stated. Purdue's Chapter 11 bankruptcy filing in 2019 aimed to resolve its liabilities, primarily stemming from numerous lawsuits accusing OxyContin of fueling the opioid crisis, which has resulted in over half a million overdose deaths in the U.S. over the past twenty years.