U.S. Bankruptcy Judge Robert Drain approved a settlement among members of the Sackler family that own Purdue Pharma LP and a handful of states that had been fighting its multibillion-dollar opioid deal.
The new agreement, which would boost the Sackler family’s contribution to as much as $6 billion, is contingent on Purdue Pharma prevailing in an ongoing appeal of its bankruptcy plan. An arm of the Justice Department is continuing to fight that plan because it would give members of the Sackler family broad protections from future opioid lawsuits.
More than 20 states asked Drain to block the new, bigger settlement because it calls for giving states that never signed on to the old deal an additional $277 million. Drain rejected those requests, siding with a lawyer for Purdue who argued the $277 million is akin to a separate settlement.
The approval lightens the load for Purdue as it seeks to overturn a federal court ruling that Drain, its bankruptcy judge, doesn’t have the authority to grant so-called third party releases to the Sacklers. As part of the new deal, attorneys general from eight states and the District of Columbia have agreed to withdraw from the appeal, leaving the Department of Justice and three personal injury victims still fighting it.
The new deal is “a remarkable and in general very positive development in this case,” Drain said in the bankruptcy court hearing Wednesday.
The bankruptcy case is Purdue Pharma LP, 19-23649, U.S. Bankruptcy Court for the Southern District of New York (White Plains).
