Tag Archives: bankruptcy

Purdue Pharma is Exploring Bankruptcy

courtroom bankruptsy

Purdue Pharma, the manufacturer of Oxycontin, is exploring the idea of bankruptcy to protect itself from over a thousand lawsuits filed across the country blaming them, in part, for the opioid addiction crisis that has claimed thousands of lives in states across the US.

The manufacturer of Oxycontin, as well as the Sackler family that controls the majority of the company, say they are under duress due to the massive litigation they face by counties, cities, and states. They have been repeatedly accused of misleading doctors through marketing and sales pressures, without mentioning the risks of addiction or downplaying those risks entirely.

The bankruptcy type that Purdue is considering is Chapter 11, which would stop the lawsuits from moving forward as Purdue settles the trials under the direction of a bankruptcy judge. Purdue hired law firm Davis Polk & Wardwell LLP for restructuring advice last August, making litigants nervous about the possibility of an insolvency claim to shut down the lawsuits.

A thousand lawsuits have been consolidated through a federal court in Ohio, where Purdue has held preliminary discussions to resolve the litigation, but nothing has come of these discussions. The breadth of the of the lawsuits has often been compared to the tobacco lawsuits in the 1990s, which dragged on for years and eventually resulted in a 246 billion dollar settlement, the largest in US history.

When asked by Yahoo News to comment, Purdue issued the following statement:

“As a privately-held company, it has been Purdue Pharma’s longstanding policy not to comment on our financial or legal strategy,” Purdue said in a statement.

“We are, however, committed to ensuring that our business remains strong and sustainable. We have ample liquidity and remain committed to meeting our obligations to the patients who benefit from our medicines, our suppliers and other business partners.”

Prescription opioids such as Oxycontin and fentanyl, as well as heroin, caused about involved in 47,600 overdose deaths in 2017according to the latest data from the U.S. Centers for Disease Control. Hundreds of states, counties, and cities have launched lawsuits due to the public health crisis.