Judge gives more time for Purdue Pharma settlement talks

Members of the Sackler family who own OxyContin maker Purdue Pharma will get protection from lawsuits for another three weeks, a judge said Wednesday, buying more time to work out a settlement of thousands of legal claims against the company over the toll of opioids.

The protections had been set to expire Thursday, but U.S. Bankruptcy Judge Robert Drain said in a hearing that they’d remain in place through March 23.

Also Wednesday, the mediator trying to broker a legal settlement between Purdue and a group of attorneys general said in a court filing that she would stay on the job, a possible sign that a deal to end the highest-profile litigation in the U.S. over the opioid epidemic is getting closer.

The hearing, conducted by video from Drain’s courtroom in White Plains, New York, was light on details. No one objected to extending the deadline or gave updates on where talks stand. But Drain noted that when he appointed another federal bankruptcy judge, Shelley Chapman, as mediator on Jan. 3, she was given the power to extend her service unilaterally only for “involvement in any secondary or drafting terms.”

“The mediation appears to me, though I am reading between the lines, to be progressing as Judge Chapman had hoped,” Drain said in the hearing, which lasted eight minutes.

The lawyers in the negotiations are under an order not to talk about it publicly — creating an opaqueness that has frustrated some advocates for victims.

As the maker of the highest-profile prescription opioid, Purdue faced a barrage of thousands of lawsuits from state, local and Native American tribal governments, along with unions, hospitals and others, blaming the company for helping spark an addiction and overdose crisis linked to more than 500,000 deaths in the U.S. over the past two decades. The company filed for bankruptcy in 2019 with the intent of reaching a sweeping settlement.

Most of the parties suing agreed to a deal last year that would have required members of the Sackler family to contribute $4.5 billion in cash and charitable assets plus give up ownership of Purdue, which would be converted to a new entity dedicating its profits to fighting the opioid crisis. Under the terms, Sackler family members would be protected from current and future civil suits over opioids. Most of the money would be restricted to uses to combat the crisis.

The attorneys general for California, Connecticut, Delaware, the District of Columbia, Maryland, Oregon, Rhode Island, Vermont and Washington state held out, arguing that the deal didn’t do enough to hold Sackler family members accountable.

On an appeal, a U.S. District Court judge ruled in December that bankruptcy courts don’t have the authority to accept such deals if not all the parties agreed. Purdue has appealed that ruling but also returned to mediation with the holdout attorneys general.

Last month, Chapman said that a “supermajority” of the nine were on board with a new plan that upped the Sacklers’ contribution to $5.5 billion to $6 billion and gave the holdout states control of some of the additional funds. It appeared that the $750 million to be awarded to victims of the crisis and their survivors would be unchanged.

Chapman did not specify which attorney general or group of them continued to dissent.

A group of 45 parents whose children died of opioid overdoses wrote a letter last week to the nine attorneys general who were challenging the settlement asking for them to say publicly where they stand on it now. The Associated Press obtained a copy of the letter.

The parents, all residents of states where the attorneys general were previously holding out, said that if the deal falls apart, it could mean there are no other funds earmarked for victims of the crisis. Other opioid settlements, including the $26 billion worth of deals finalized last week involving drugmaker Johnson & Johnson and distribution companies AmerisourceBergen, Cardinal Health and McKesson, do not have any provision for payments to victims.

“Please don’t prolong this painful chapter for us and let’s begin the work of compensating the victims and saving lives,” the parents said in the letter.

Suzanne Domagala, of Millville, Delaware, just wants to see the Sacklers pay as much as possible, saying that giving them immunity from further lawsuits seems outrageous.

Her son, Zach, a Marine Corps reservist, became addicted after injuring his shoulder during boot camp. When he died in 2017, she said she didn’t have the money to bury him and it took a few years before she could afford a headstone.

“That’s why when you’re looking at the costs of these things, money is such a trivial thing, but it’s the only way to exact any justice,” she said.

President Joe Biden called on Republicans and Democrats during his State of the Union address Tuesday to work together on ending the epidemic, underscoring how it continues to be a nightmare for so many.

“If you’re suffering from addiction, know you are not alone,” he said.

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Mulvihill reported from Cherry Hill, New Jersey, and Seewer from Toledo, Ohio.

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