A new settlement agreement was achieved on Thursday in the Purdue Pharma Bankruptcy Litigation.
The case was originally filed in the New York Southern Bankruptcy Court under Judge Robert D. Drain and reached a settlement that would allow the reformation of the Purdue Pharma Company. The settlement was also criticized as not permitting sufficient funds for the pool of affected parties in the opioid epidemic. The settlement was also unpopular due to a clause which permitted the immunization of the owners, the Sackler family, from facing personal liability to suit from members of the class.
The original settlement was appealed to the New York Southern District Court under the review of Judge Colleen McMahon. The appeal was made by eight state attorneys general and was supported by the U.S. Bankruptcy Trustee’s office. The judge held that the Bankruptcy code does not grant a bankruptcy judge authority to grant immunity to third party lawsuits to parties that are not themselves declaring bankruptcy.
However, the court did not review prior transfers of funds from the company to members of the family, nor did the court issue an opinion regarding requiring a statement of accountability from the family, which were also arguments raised in objection to the original settlement.
The decision of the district court has been appealed to the Second Circuit, but in the interim the parties returned to work on a new settlement agreement which was reached on Thursday, per the Associated Press. The deal has several new terms, including more funds contributed directly from the Sackler family to the trust fund of up to $6 billion, bringing the total settlement funds to $10 billion dollars. This includes a $750 million dollar fund for named individual victims and their survivors.
The new settlement agreement also include non-monetary provisions, including the Sackler family loosing ownership and control of the new Purdue Pharmacy company, an official statement of regret from the Sackler family, and a video session between the family and members of the named victims pool, a provision that was absent from prior settlement agreements.
The settlement agreement will still need to undergo review by the court and may face further appeals.
