Sacklers are increasing their offer to settle Purdue opioid disputes with a fresh condition

Seven months after the Supreme Court reached a settlement that would have resolved thousands of opioid cases against Purdue Pharma, the company’s owners, members of the Sackler family, have increased their cash offer to settle the dispute – but with a fresh catch.

Under the framework of the fresh settlement, the Sacklers would not receive immunity from future opioid lawsuits, a condition they have long insisted on but which the court said was unacceptable.

Instead, they will pay up to $6.5 billion – $500 million more than in the previous agreement – but under a fresh condition: Plaintiffs, including states, municipalities and individuals, will have to set aside as much as $800 million in an account that resembles a legal account. -a defense fund for billionaires to fight such cases, according to people familiar with the negotiations.

Some details of that framework — but not the legal defense fund — were announced by Up-to-date York Attorney General Letitia James on Thursday. She said the total settlement amount was $7.4 billion, including $897 million from Purdue.

She said Up-to-date York could receive as much as $250 million.

“The Sackler family relentlessly pursued profit at the expense of vulnerable patients and played a key role in starting and fueling the opioid epidemic,” Ms. James said.

She added that once the deal is completed, the Sacklers “will no longer have control over Purdue and will never again be able to sell opioids in the United States.”

Echoing other findings in the nationwide opioid litigation, these payments are intended to fund addiction prevention and treatment efforts in the hardest-hit communities across the country.

It is not known how many applicants will agree to the fresh conditions. Ms. James noted that 14 other states involved in talks are on board, including Florida, Connecticut, Massachusetts, Tennessee, California and West Virginia.

But now the deal must be sold to all claimants – not just the remaining states and thousands of local governments, but also the approximately 140,000 personal injury victims and hundreds of Native American tribes.

The legal reserve fund for the Sacklers may be drying up: Several states, counties, cities and individuals have already threatened fresh lawsuits against the Sacklers.

A spokesman for Washington state, which has successfully partnered with other drug companies rather than signing national contracts, said the state is considering options.

States, which are responsible for most of these payments, would have to keep at least $200 million on hand, and total contributions would be $800 million. After five years, unused funds will begin to return to the states.

Final calculations of how much will be withheld to cover attorneys, consultants and administrative fees are still under discussion.

The Sacklers will pay nearly $3 billion over the first three years, with remaining payments over an additional 12 years.

If the plan is approved by the plaintiffs, a Justice Department body that oversees the bankruptcy system called the U.S. Trustee and a federal bankruptcy judge, Purdue would emerge by the end of this year from the bankruptcy that has shielded it since 2019. That would be possible. immediately pay $897 million of its own cash to the parties that signed the agreement.

This process is expected to be completed by the end of the year.

Sackler’s 15-year payments would also begin at that point. And most of the lawsuits that began more than a decade ago and eventually evolved into awkwardly coupled lawsuits brought by cities, states, tribes, hospitals and individual victims, and argued by countless teams of lawyers, would probably end.

In a plan rejected by the Supreme Court, the Sacklers, long portrayed in movies, television and newspaper articles as the public face of predatory opioid producers, demanded a $6 billion guarantee: All current and future lawsuits against them would involve Purdue and opioids would be banned.

Purdue itself receives this protection as part of a standard benefit provided when a company emerges from bankruptcy. However, because the Sacklers did not file for bankruptcy themselves, the Supreme Court ruled in June that granting them enduring civil immunity was outside the scope of bankruptcy law.

The purpose of the legal reserve fund, which will essentially be used by plaintiffs to pay to defend the Sacklers against other plaintiffs, is to satisfy the court’s ruling.

“If states are expected to provide funds for the Sacklers’ legal defense, the public will want to hear more about the impact of that money going to the Sacklers and their lawyers, not to reducing opioid consumption,” said Melissa B. Jacoby, owner of the bankruptcy partnership expert at the University of North Carolina School of Law.