This story was updated at 3:40 p.m. on Sept. 12 with a statement from Vermont’s Attorney General’s Office.
Vermont will not be part of what could be the largest settlement yet in mounting legal fights linked to an opioid crisis that has touched every corner of America.
The Associated Press reported Wednesday afternoon that attorneys for about half of the U.S. states and some 2,000 local governments had agreed to a deal in which Purdue Pharma and the Sackler family, which owns the company, would pay out some $12 billion over a number of years. The Sacklers would also give up ownership of the company.
Vermont Attorney General TJ Donovan said in a text message Wednesday: “Vermont did not join the settlement.”
Donovan explained his decision in a statement released Thursday. He said the value of the settlement — reported at $10-12 billion — is not guaranteed, adding “we want to be certain that any benefit is not illusory.”
“Second, I do not believe that going to bankruptcy court to create and spin-off a new, public benefit company is in the public’s interest. I would prefer to shut down the company, sell the company’s assets now, and put the proceeds to use helping Vermonters whose lives have been ruined,” the statement said.
“Third, I want to be sure that billionaires can’t use bankruptcy court as a vehicle to avoid accountability,” he added. “I believe in due process. I believe in the rule of law. But I also believe that the story needs to be told about how this epidemic started.”
Other attorneys general were split in their opinions of the tentative settlement.
Tennessee’s attorney general, Herbert Slatery, said the deal represented “meaningful relief to address the opioid crisis,” according to the New York Times. He added that it “would secure billions of dollars nationwide to go toward addressing the devastating effects of the opioid epidemic and will result in the Sackler family divesting themselves of their business interests in the pharmaceutical industry forever.”
However, Pennsylvania Attorney General Josh Shapiro lashed out at the terms of the deal. He called it “a slap in the face to everyone who has had to bury a loved one due to this family’s destruction and greed,” according to the AP.
“This is far from over,” he added, noting that the current settlement does not require the Sacklers to admit any wrongdoing.
Instead, the Sacklers would agree to give up $3 billion of their own fortune over seven years, begin structured bankruptcy proceedings for Purdue and sell another of their pharmaceutical companies, Mundipharma, which has an expected value of $1.5 billion.
The total payout could reach $12 billion, a figure that matches an offer that Purdue made in late August, NBC News reported.
New York Attorney General Letitia James said Wednesday the owners of Purdue were “attempting to evade responsibility and lowball the millions of victims of the opioid crisis,” according to the AP.
Purdue did not immediately respond to a request for comment.
The Sacklers had been hoping for a universal settlement that would cap their future liability for the opioid crisis. While it doesn’t look like this deal will make that happen, the company would likely be shielded from further litigation during bankruptcy proceedings.
Donovan has promised that Vermont will continue pursuing legal action against the Sackler family directly, even if Purdue’s legal woes move to bankruptcy court.
“My belief is that our claims against the Sackler family personally and individually is not dischargeable,” he said on Monday, responding to reports that negotiations between states and the Sacklers had stalled.
Vermont sued Sackler family members in May for their hand in fueling the opioid crisis.
“They made billions of dollars off the backs of patients who became addicted to OxyContin,” Donovan said at the time. “The entire Sackler family has been unjustly enriched by their misdeeds.”
