AG opposes Purdue Pharma settlement deal as more states accept it

Attorney General TJ Donovan speaks during a press conference at the Statehouse in Montpelier on Jan. 9, 2020. Photo by Glenn Russell/VTDigger

Vermont is continuing its opposition to a bankruptcy plan for Purdue Pharma as 15 other states that had been fighting it have dropped their challenges to the proposal.

Vermont’s opposition to the plan from the makers of OxyContin may be moot now that other states have backed off, making it “now all but certain” it will be approved, NPR reported Thursday. 

News of the action by the 15 other states was revealed in documents filed in federal court in White Plains, New York, in connection with the company’s bankruptcy case Wednesday night.

In refusing to join those other states, Vermont Attorney General TJ Donovan said in a statement Thursday that the plan does not go far enough to hold the owners of the company, the Sackler family, accountable.

“The Sacklers are the founders and owners of Purdue Pharma, which sparked and fueled the opioid crisis,” Donovan said. 

“Through this bankruptcy plan,” the attorney general added, “the Sacklers are leveraging their enormous wealth to obtain the protection of the bankruptcy court by having the court extinguish the states’ claims against the Sacklers.”

Asked about Donovan’s opposition to the bankruptcy plan, Rebecca Kelley, a spokesperson for Gov. Phil Scott, said in an email that the governor believes the most important thing is that “settlement funds be put to work equitably and as soon as possible to combat the ongoing opioid crisis.”

Kelley added, “We must rely on the Attorney General’s judgement and that the courts will ultimately make the right decision.”

The state had sued Purdue Pharma as a corporation in 2018, and in 2019 brought suit on behalf of the state against eight members of the Sackler family, founders of the pharmaceutical giant Purdue Pharma. 

The lawsuit alleged that the Sacklers contributed to the opioid crisis in Vermont by deceptively marketing the painkiller OxyContin for years.

The company, which has been facing about 3,000 lawsuits from state and local governments as well as others, filed for bankruptcy protection in 2019.

According to the court filing Wednesday night by a mediator in the case, the Sackler family is putting in $50 million more toward the settlement than had earlier been proposed. 

Also, $175 million from the family’s charities and foundation will go toward “purposes consistent with philanthropic and charitable efforts to ameliorate the opioid crisis.”

As part of the settlement, the Sackler family does not admit any wrongdoing. Under the deal, according to NPR, members of the Sackler family would be protected from future opioid lawsuits.

In total, according to an Associated Press report, Sackler family members are contributing $4.5 billion toward the settlement. 

Also, that report stated, the company would make “tens of millions” of internal records public.

Purdue Pharma, in a statement Thursday, said it would continue to push for “even greater consensus” for the bankruptcy plan.

“The progress made in the third and final round of mediation builds upon the support already publicly expressed by nearly every organized creditor group in the bankruptcy proceedings,” the statement added. 

Mortimer and Raymond Sackler families, in a statement, said that the resolution reached through the mediation “is an important step toward providing substantial resources” to those in need.

“The Sackler family hopes these funds will help achieve that goal,” the statement added. 

A court hearing on whether the bankruptcy plan will be approved is set for next month. 

The Associated Press reported that it’s “more likely” that the plan will be approved with the added states signing off on the deal.

Massachusetts Attorney General Maura Healey helped to lead the fight by the states against Purdue Pharma. On Thursday, Healey said she would accept the deal. 

“While I know this resolution does not bring back loved ones or undo the evil of what the Sacklers did,” Healey said in a statement, “forcing them to turn over their secrets by providing all the documents, forcing them to repay billions, forcing the Sacklers out of the opioid business, and shutting down Purdue will help stop anything like this from ever happening again.”

The settlement, according to Healey, requires Purdue Pharma to be “wound down or sold.” She added that the deal keeps the Sacklers from the opioid business and calls for them to turn over control of the family’s foundations to an independent trustee to be used to address the opioid epidemic.

Donovan, Vermont’s attorney general, was not available for an interview Thursday. 

Charity Clark, Donovan’s chief of staff, said in an email Thursday that the amount of money Vermont would receive under the bankruptcy plan is unclear at this point. 

“Under the bankruptcy plan,” she wrote, “Vermont would receive just under 3/10ths of 1% of available funds from the Sacklers. The total amount of funds available will depend on a number of factors, including the total proceeds from sale of Purdue Pharma.”

The Bangor Daily News reported Thursday that the state of Maine would receive $20 million, while Healey, Massachusetts’ attorney general, reported that state would receive $90 million. 

Also, according to Clark, if the Sacklers successfully receive a release of the claims against them, the lawsuit brought against them by Vermont in state court would be “extinguished.” 

In addition, as part of the bankruptcy plan, Clark stated, “the claims against Purdue will also be extinguished.”

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