Appeals court to move quickly on Purdue Pharma opioid deal
- Law Firms
(Reuters) - Purdue Pharma LP’s effort to revive its reorganization plan and $4.5 billion opioid litigation settlement will be considered quickly, an appeals court said on Wednesday.
The 2nd U.S. Circuit Court of Appeals said in a one-page order on Wednesday that it will consider the OxyContin maker's appeal on an expedited basis but did not provide a detailed timeline.
Purdue has appealed a December ruling that reversed a bankruptcy court’s approval of its plan and settlement. The judge who overturned the settlement said the bankruptcy court did not have the authority to approve the legal protections against opioid-related litigation for the company’s Sackler family owners, which are an essential part of the deal.
Purdue, which filed for bankruptcy in 2019 to resolve thousands of lawsuits accusing it and the Sacklers of fueling the U.S. opioid epidemic through deceptive marketing, said in court papers that the December ruling upended decades of precedent allowing so-called "nondebtor releases" in corporate bankruptcies.
The releases were a source of conflict throughout the bankruptcy. Several states and the U.S. Department of Justice’s bankruptcy watchdog, the U.S. Trustee, argued that the Sacklers, who have denied wrongdoing, should not receive protection against future opioid lawsuits since they didn’t file for bankruptcy themselves.
The Sacklers, meanwhile, say they are entitled to the releases in exchange for the approximately $4.5 billion they contributed to the settlement, which directs funds toward opioid abatement programs.
Purdue has requested that arguments be held before the court in April.
Purdue said in a statement on Wednesday that it hopes to move as quickly as possible through the appeals process. Additionally, the company is continuing to work with states on a revised settlement.
The U.S. Trustee declined to comment.
The case is In re Purdue Pharma LP, 2nd U.S. Circuit Court of Appeals, No. 22-85.
For Purdue: Marshall Huebner, Benjamin Kaminetzky, Timothy Graulich, Eli Vonnegut, James McClammy, Christopher Robertson and Gerard McCarthy of Davis Polk & Wardwell
(Editor's Note: This story has been updated with a comment from Purdue Pharma.)
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