Skip to main content
Open this photo in gallery:

Bottles of prescription painkiller OxyContin made by Purdue Pharma LP sit on a shelf at a local pharmacy in Provo, Utah, in 2017. Purdue is using the bankruptcy process to try to end years of lawsuits.George Frey/Reuters

As much as some dislike it, Purdue Pharma’s plan to settle thousands of lawsuits over opioids is better for states than allowing them to continue lawsuits against the company and its owners, a company lawyer told a judge Wednesday.

Purdue is using the bankruptcy process to try to end years of lawsuits claiming its marketing and sales strategy for the powerful painkiller OxyContin helped touch off and extend the opioid epidemic.

In testimony and arguments over the past two weeks, the key focus has been the contention from a group of state governments that want the plan rejected primarily because members of the wealthy Sackler family who own Purdue would be granted protection from lawsuits over opioids, even though they themselves are not filing for bankruptcy protection.

U.S. Bankruptcy Court Judge Robert Drain, based in White Plains, N.Y., said he expected to have a ruling Friday on whether to accept the plan.

In the final day of the hearing Wednesday, debate focused on other, narrower issues.

Some objecting states asserted they should be able to continue with lawsuits against Purdue and Sackler family members because the settlement is not in their best interest.

Marshall Huebner, a Purdue lawyer, rejected that idea. He said if lawsuits with claims totalling trillions of dollars were to go ahead, Purdue’s value would keep diminishing and there would be far less to go around than the settlement would provide.

“If all the states have meritorious claims, then it stands to reason that many other public creditors also have meritorious claims,” Mr. Huebner said.

Irve Goldman, a lawyer representing some of the objecting states, told Judge Drain that logic wasn’t right.

“It’s likely that states would receive judgments against one or more Sacklers,” Mr. Goldman said. And as a result of lawsuits, family members could end up being required to pay more than they’ve agreed to in the settlement.

But Judge Drain said pulling Sackler trust money into U.S. courts would not be a sure thing because some of it is protected by laws elsewhere.

Also Wednesday, Judge Drain heard arguments over whether West Virginia’s share of a settlement would be too small, whether it’s appropriate that Canadian municipal governments would be shut out of abatement programs or whether inmates should have more time to file claims for money for individuals.

The overwhelming majority of the government entities, individuals and others with claims against Stamford, Conn.-based Purdue that voted on the company’s plan supported it.

Under the deal, Sackler family members would give up ownership of the company and contribute US$4.5-billion in cash and control of charity funds. They would also have to get out of the opioid business in other countries eventually.

Most of the funds they would contribute plus future profits from the new company would be used to pay to abate the opioid crisis and pay some individual victims or their families amounts expected to range from US$3,500 to US$48,000.

Overdoses from both prescription opioids and illicit ones such as heroin and illegally made fentanyl have been linked to more than 500,000 deaths in the United States since 2000.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe