A federal judge on Wednesday approved a controversial bankruptcy settlement for OxyContin manufacturer Purdue Pharma that would shield the members of the Sackler family who own the company from future opioid-related claims.
Judge Robert Drain signed off on the settlement plan during a six-hour bench ruling, setting the stage for the dissolution of the company. Its assets would be transferred to a new firm owned by a trust and run to combat the opioid crisis.
"I wish the plan had provided for more, but I will not jeopardize what the plan does provide," Drain said.
The settlement money from the deal would go to government entities, which have agreed to use it to address the opioid crisis, along with individual victims and their families.
Purdue, the maker of OxyContin, filed for bankruptcy in 2019 in an attempt to settle about 3,000 lawsuits from states, tribes and other local entities related to the company's aggressive opioid marketing that they argue contributed to the opioid crisis that has killed nearly 500,000 people over the past 20 years.
The settlement plan would permanently shield members of the Sackler family and hundreds of their associates from future opioid lawsuits.
They would admit no wrongdoing and would retain much of the fortune they made from Purdue. In return, they would give up ownership of the company and pay more than $4 billion in cash and charitable assets in installments over the course of nine years.
The Sacklers themselves are not the subject of the bankruptcy proceedings.
In a statement, members of the family of the late Mortimer Sackler, a board member and co-owner of the company, said they hope the resolution "will signal the beginning of a far-reaching effort to deliver assistance where it is most needed."
They disputed "allegations that have been made about our family," but apologized "for the suffering and loss people have experienced and recognize the anger or hurt that many people have felt alongside their grief."
Steve Miller, chairman of Purdue’s board of directors, praised the decision, noting it was approved by 95 percent of the company's creditors.
“Instead of years of value-destructive litigation, including between and among creditors, this Plan ensures that billions of dollars will be devoted to helping people and communities who have been hurt by the opioid crisis," he said in a statement.
Drain said the case was the most complex he has ever faced, and also expressed frustration that much of the Sacklers' fortune was parked in offshore accounts.
"This is a bitter result. B-I-T-T-E-R," he spelled out. "It is incredibly frustrating that people can send their money offshore."
Critics point to the introduction of the painkiller OxyContin in the late 1990s, pushed by Purdue and the Sackler family members who were on the board, as one of the primary drivers of the opioid epidemic.
Drain repeatedly said that even though he felt the settlement should have been larger, it was negotiated fairly.
"While I wish this amount would be higher, the settlement itself fairly reflects the standards laid out in the Supreme Court. ... Clearly both it and the process in arriving at it has not been in any way shape or form a free ride for the Sacklers or allowed them to 'get away with it,'" Drain said.
Supporters of the settlement agreement argued it's important to get as much money flowing as quickly as possible. Almost every U.S. state agreed to support the deal.
Attorneys general for nine states and the District of Columbia opposed the deal, as did the Justice Department. They said it violates the constitutional rights of people with potential opioid claims because it improperly denies them the chance to sue the family directly.
Drain said he understands that the settlement is imperfect, especially because the Sacklers did not admit any wrongdoing. But he urged the attorneys who opposed the deal not to appeal.
“It would be a real service to millions, if not tens of millions, of people if the objecting states, or at least some subset of them, were able to resolve their differences with the Sacklers,” he said.