Purdue Pharma Files Chapter 11 Bankruptcy
Purdue Pharms & the Opioid Crisis
Purdue Pharma is a privately-held American pharmaceutical company owned and operated by the Sackler family. Since 1991, the company has focused on developing and marketing pain management medications, including oxycodone, hydromorphone, codeine, fentanyl, and hydrocodone. However, in 1995, this negligent company sparked the opioid epidemic by aggressively advertising OxyContin as a nonaddictive painkiller. By 1996, millions of doctors across the country were mass-prescribing OxyContin and other opioids because they were deceived by misleading marketing campaigns and falsified reports.
As of 2017, there have been over 400,000 American fatalities linked to overdoses involving prescription and synthetic opioids. In fact, according to the National Safety Council, opioids are responsible for over 100 preventable fatalities each day. Meanwhile, the Sackler family has accumulated billions of dollars by knowingly selling addiction-causing prescription drugs.
State Attorneys General Hold the Sackler Family Accountable
On September 14, 2019, Purdue Pharma filed for Chapter 11 bankruptcy as part of a $10 billion agreement to settle thousands of lawsuits filed by 2,300 local governments in 23 different states. As Steve Miller, the chairman of Purdue Pharma’s board of directors, explained, “This settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation, and instead will provide billions of dollars and critical resources to communities across the country trying to cope with the opioid crisis.”
The Sackler family has also agreed to relinquish ownership of Purdue Pharma to avoid future litigation. Going forward, the company will be rebranded under non-Sackler ownership and managed by a group of trustees. However, Pennsylvania Attorney General Josh Shapiro claims that the case is “far from over” and “This apparent settlement is a slap in the face to everyone who has had to bury a loved one due to this family’s destruction and greed.” At present, 26 states have opposed this deal and are planning to take the Sackler family to state courts – especially after investigators discovered nearly $1 billion in wire transfers made by Purdue Pharma to Swiss bank accounts on behalf of the Sackler family.
Will the Bankruptcy Affect My Lawsuit?
A Chapter 11 bankruptcy filing benefits Purdue Pharma because it freezes any lawsuits (automatic stay) targeting the drugmaker and the Sackler family. These lawsuits will likely be shifted into bankruptcy court to ensure the company can preserve its value while negotiating with plaintiffs and creditors. Your legal team can still negotiate or litigate for a settlement that reflects your personal and financial losses.
However, there is one detail that could complicate this scenario: Purdue Pharma is just one of many defendants in this multidistrict litigation (MDL). Plus, even if the judge segments the claims against Purdue Pharma to continue the MDL, the drug company’s creditors have first crack at any assets. In this scenario, plaintiffs become “unsecured creditors” and only have access to assets that are leftovers from secured creditors. The bankruptcy judge or an appointee determines how much each creditor is owed and then divides up the company’s remaining assets proportionately.
According to Bobby Allyn, a reporter with NPR, “The idea is to produce a resolution in a faster, more focused manner than would be the case in civil court. And even if plaintiffs only receive a fraction of what they are owed, the aim is to get everyone a piece of the pie.” The bankruptcy process also prevents one plaintiff from litigating for the full amount owed to them and leaving little for other plaintiffs.
Pursue Justice with the Ferraro Law Firm
Contact the opioid litigation attorneys at The Ferraro Law Firm if you, a loved one, or your municipality has suffered harm due to the opioid epidemic. Our legal team is passionately committed to fighting Florida’s opioid crisis; in fact, our highly skilled legal team is currently representing Palm Beach County and its lawsuit against 29 pharmaceutical companies. If you’re ready to pursue justice and protect the lives of your community members, contact The Ferraro Law Firm today.
Contact The Ferraro Law Firm at (888) 554-2030 to schedule a free consultation.