Judge set to rule on OxyContin maker Purdue Pharmas settlement plan

A New York judge is expected to rule Wednesday on a bankruptcy settlement that would shield the Sackler family, which owns OxyContin maker Purdue Pharma, from future lawsuits over the opioid crisis.

If U.S. Bankruptcy Judge Robert Drain approves it, members of the Sackler family would pay $4.5 billion and transfer ownership of Purdue to a trust. The drugmaker would be dissolved and turned into a new company dedicated to combating the opioid epidemic, which has killed more than 500,000 Americans over the last two decades.

The family members’ payment and profits from the new company would be used to compensate some victims of the crisis, with payouts estimated between $3,500 and $48,000.

Purdue values the settlement at more than $10 billion. It would end years of litigation with states and local governments that alleged the company and its owners aggressively marketed OxyContin despite knowing it was highly addictive and subject to abuse.

If the judge does not approve the plan, the cash payouts would not be made, but other suits targeting Purdue and the Sackler family members that had been put on hold would likely resume.

Nine states, Washington, D.C., Seattle and the Justice Department’s U.S. Trustee Program, which oversees bankruptcy-related cases, have opposed the settlement over its contentious provision giving legal protections to the Sackler family. They could appeal the judge’s ruling.

Maryland state Attorney General Brian E. Frosh argues the plan would allow the family “to walk away from the wreckage that has been caused by Purdue’s malfeasance.”

“The Sacklers would be allowed to enjoy billions of dollars that they received from Purdue, and, unlike other debtors in bankruptcy, be shielded from liability for the staggering damage that they left in their wake,” Mr. Frosh said in July.

• This story is based in part on wire service reports.

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