Suits against OxyContin owners on hold; negotiations ordered

Even though one judge rejected OxyContin maker Purdue Pharma’s sweeping settlement of thousands of lawsuits over the opioid crisis, another refused Wednesday to allow litigation to move ahead against members of the Sackler family, instead ordering negotiations for a reworked deal.

U.S. Bankruptcy Judge Robert Drain granted Purdue’s request to extend an injunction until Feb. 1, protecting the company and the Sacklers from litigation. He also ordered Purdue, the Sacklers, the states and other parties to negotiate a new settlement.

In a hearing Wednesday via video conference, the White Plains, New York-based judge warned the family and others that he would end the protections early if there are not serious talks toward a new settlement. “If the parties do not negotiate in good faith,” he said, “they will face the consequences of the injunction unraveling.”

Drain is the same judge who approved the company’s settlement in September.

The deal had been hashed out over two years of negotiations and mediation in bankruptcy court. Eventually, lawyers for the overwhelming majority of local governments and states, including Massachusetts, signed on.

The plan called for members of the Sackler family to give up ownership of Purdue, which would be transformed into a new company.

Sackler family members would also contribute $4.5 billion in cash and charitable assets, with the money to go to victims and efforts to end the crisis, which has been linked to more than 500,000 deaths in the U.S. since 2000, counting overdoses of both prescription opioids and illicit ones, such as heroin and illegally produced fentanyl.

As part of the settlement, the Sackler family members were also granted protections from lawsuits over opioids.

But eight states and one office in the U.S. Department of Justice objected. They said it was improper for them to be forced to give up their right to sue members of the Sackler family, who themselves were not seeking bankruptcy protection.

The holdout states argued that the $4.5 billion does not properly hold the family members accountable.

In December, U.S District Judge Colleen McMahon ruled in favor of those states, finding that judges do not have authority to grant third-party releases as Drain did.

Purdue said it would appeal that ruling while also trying again to strike a settlement deal that all the states would be willing to join. The Stamford, Conn.-based company also asked Drain to protect it and the family from lawsuits while that’s sorted out.

Lawyers for Sackler family did not speak at Wednesday’s hearing. Representatives of the family did not immediately respond to questions from The Associated Press.

from Boston Herald https://ift.tt/32BhD3B