12/2/2025
Update: Purdue’s $7.4B Ch. 11 Plan Confirmed
After six years of negotiations, a New York bankruptcy judge agreed to confirm Purdue Pharma’s $7.4 billion Chapter 11 bankruptcy plan. On November 14, Judge Sean H. Lane ended the third day of the hearing by indicating he would confirm the revised plan under which the company will dissolve and the owner-members of the Sackler family will relinquish ownership of the company and pay up to $7 billion of their personal fortune over 15 years to compensate the states, tribes and other municipalities harmed during the opioid crisis that has raged for decades. The confirmation resolves thousands of lawsuits filed against the company. Judge Lane provided a more in-depth ruling at the two-hour hearing held on Tuesday, November 18 during which he observed:
“Nothing that we can do in these bankruptcy cases will bring back a loved one who died from opioid abuse or heal the pain that opioid use has caused to the health and happiness of affected families across America. But it is the job of the parties in these cases and the job of the court to do the best that we can all do to administer these bankruptcy cases under the applicable law for the benefit of victims, both individuals and entities, who are creditors in these cases and often referred to as claimants, because they have been harmed by the use of the debtors’ products.”
The confirmation concludes a years-long legal odyssey that began when the company filed for bankruptcy in 2021 in an effort to manage thousands of lawsuits that alleged the company had engaged in deceptive and aggressive mass marketing practices that downplayed the addictive nature of the company’s painkiller OxyContin. The first plan had required all creditors to release all claims against the Sacklers themselves, which sparked a lengthy appeal that resulted in a 2024 U.S. Supreme Court ruling that nonconsensual releases of third-party claims against non-debtors were prohibited by the bankruptcy code which barred the requested releases for third parties without creditor consent. The company than offered an amended plan with increased contribution from the Sackler family members and a provision that allowed creditors to opt out of releases for the company owners in exchange for reduced compensation. There was broad support for the plan as evidenced by the fact that 99% of the voting creditors were in favor of it. The 21 objectors were pro se personal injury claimants.
Among those to be compensated are states, municipalities, school districts, hospitals, tribes and nearly 150,000 personal injury victims and families of babies born with opioid withdrawal.
Purdue will be required to immediately contribute $900 million to a public benefit company to be named Knoa Pharma; this entity will continue to manufacture limited quantities of opioid painkillers as well as overdose-reversal medications. The new company will be managed by a group of independent directors chosen by states and territories who supported the plan.
In response to the decision, Purdue issued a statement in support of the plan confirmation that read in part:
The Bankruptcy Court ultimately indicated it will rule that the Plan satisfies all applicable requirements under the Bankruptcy Code, and that the settlements are fair, equitable, and in the best interests of the creditors. The Court further recognized that the Plan is consistent with the U.S. Supreme Court’s Harrington decision because each creditor can decide whether or not to settle and release any direct claims they hold against the Sacklers.
The statement also details the specifics of the payouts and timelines to be followed as the plan is executed.
Update: Purdue Given OK to Start Processing Claims Ahead of Plan Confirmation
At a hearing on Thursday, April 10, U.S. Bankruptcy Judge Sean H. Lane approved the motion filed jointly by Purdue Pharma and the Official Committee of Unsecured Creditors to appoint PI and TPP Claims Administrators and authorize the establishment of claims deadlines and objection procedures before the actual confirmation of the Chapter 11 bankruptcy plan. Judge Lane noted that allowing Purdue to start processing and analyzing the claims of personal injury and third-party payor claimants would enable the pharmaceutical giant to make faster distributions to creditors, in an effort to get most payments out by the plan effective date. The court’s approval of the motion will allow Purdue to send out notices of the procedures to creditors, at which point those creditors will be in a position to submit evidence in support of their claims. Purdue will then be able to file objections to any claims it feels should be disallowed.
The hearing on the revised Chapter 11 plan that includes the $7.4 billion settlement is scheduled for May. Plan confirmation is anticipated in September, 2025.
Update: Purdue Files New Chapter 11 Bankruptcy Plan
On March 18, 2025, bankrupt drugmaker Purdue Pharma LP and its affiliated debtors filed their Thirteenth Amended Joint Chapter 11 Plan of Reorganization. The revised plan includes $900 million from the debtor and another $6.5 billion from members of the Sackler family. The new plan replaces an earlier one that was rejected by the U.S. Supreme Court because it included involuntary third-party releases that shielded members of the Sackler family from liability for opioid-related claims filed by states, local governments and individuals despite the fact that they had not filed for bankruptcy.
Similar to the earlier plans, the company will be reorganized into a public benefit trust designed to pay claims resulting from the nationwide opioid crisis. Opioid claimants will have the option to release their claims against the members of the Sackler family in exchange for a share of the $7.4 billion settlement fund. Claimants who decline to release their claims against the family will only be eligible for a share of the $900 million to be paid by the company.
Another hearing will be scheduled to take place to determine whether the plan is sufficient to allow the creditors to vote; in the interim Purdue has requested an additional 57 day extension of the Sackler claim injunction.
March 18, 2025
The Purdue Pharma bankruptcy case, which began in 2019, has left tens of thousands of opioid victims still waiting for compensation. Despite the staggering toll of opioid addiction, estimated at over 800,000 deaths—the legal proceedings have dragged on for five years with no direct payments to those who have suffered the most.
Of the 140,000 claimants in the case, only 10% are individuals directly impacted by opioid use disorder (OUD) and addiction. The remaining 90% consist of states, pharmacies, hospitals, insurance companies, and the 41 law firms involved in litigation. This breakdown raises concerns about who truly benefits from the bankruptcy settlement and whether victims are being sidelined in favor of institutional creditors.
Originally positioned as a way to hold Purdue Pharma accountable and provide restitution to those harmed by its aggressive marketing of OxyContin, the bankruptcy proceedings have instead become a prolonged legal battle. Meanwhile, victims and their families continue to struggle with the devastating consequences of opioid addiction without meaningful relief.
As the legal process drags on, the fundamental question remains: When will the victims finally see justice? The recent 60 Minutes investigation (aired on March 9, 2025) sheds light on the ongoing delays and the imbalance in compensation. Without a resolution that prioritizes those who have suffered the most, the Purdue Pharma case risks becoming yet another example of a system that protects institutions over individuals.
For those affected by the opioid crisis, time is not a luxury they can afford. The legal system must act swiftly to ensure that justice is not only promised but delivered.
Litigation Update: Opioid Settlement with Sackler Family
January 30,2025
On January 23, a coalition of 15 states announced that they had reached a $7.4 billion settlement with the Sackler family and Purdue Pharma Inc. The states include California, Colorado, Connecticut, Delaware, Florida, Illinois, Massachusetts, New York, Oregon, Pennsylvania, Tennessee, Texas, Vermont, Virginia and West Virginia. Under the terms of the agreement, the Sacklers will pay up to $6.5 billion over 15 years and Purdue will pay $900 million. The new settlement exceeds the original 2021 deal by $3.1 billion and does not include the nonconsensual releases sought by the Sackler family that were invalidated by the U.S. Supreme Court in June 2024 at the same time the high court rejected the previous $6 billion settlement.
This deal ends the Sackler family’s ownership control over Purdue Pharma, the company credited with instigating the decades-long opioid crisis that began with the 1996 introduction of its powerful painkiller OxyContin to the market; Purdue continued to fuel the drug epidemic through its manufacture of highly addictive opioid products and its use of aggressive marketing techniques that downplayed the risk of addiction inherent in their use.
The Sackler/Purdue deal is the latest in a series of settlements reached with other manufacturers, retailers and distributors of opioids valued at $50 billion. There are still some states who have not yet agreed to sign onto the latest settlement, including Washington state.
The new deal provides for an immediate payment of $1.5 billion, $500 million after one year and an additional $500 million after two years, plus another $400 million after three years.
