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Purdue Pharma can appeal rejection of bankruptcy plan

NEW YORK (CNA) – A United states (US) judge on Friday allowed Purdue Pharma to immediately challenge her rejection of legal protections for Sackler family members who own the OxyContin maker, and which were a major component of its bankruptcy reorganisation plan.

US District Judge Colleen McMahon’s ruling means Purdue will have another shot at keeping intact a USD4.5 billion opioid litigation settlement at the heart of the company’s plan. She gave Purdue until January 17 to file the appeal to the New York-based 2nd US Circuit Court of Appeals.

McMahon reversed a bankruptcy judge’s order approving the deal in December.

The settlement provides so-called non-debtor releases that shield the Sacklers against future opioid-related lawsuits.

Purdue filed for bankruptcy in 2019 in the face of thousands of lawsuits accusing it and the Sacklers of fuelling the opioid epidemic through deceptive marketing.

The Sacklers, who have denied wrongdoing, contributed the USD4.5 billion to the settlement in exchange for the releases. Under Purdue’s reorganisation plan, settlement funds would be directed toward opioid abatement programmes.

A pharmacist holding a bottle OxyContin made by Purdue Pharma at a pharmacy in Provo, Utah. PHOTO: CNA