US Federal Appeals Court Upholds Plan to Dissolve Purdue Pharma in Opioid-Litigation Settlement
A US federal appeals court has upheld Purdue Pharma’s bankruptcy and reorganization plan, which involves a $6-billion settlement to resolve opioid-related litigation. The plan, which had received approval from a US federal bankruptcy court in September 2021, was challenged on appeal by plaintiffs seeking further civil liability from the Sackler family, the once owners of the privately held Purdue Pharma, the manufacturer of the opioid, Oxycontin (oxycodone).
Under its ruling, the US Court of Appeals for the Second Circuit affirmed Purdue Pharma’s bankrupty and reorganization under which Purdue Pharma will be dissolved to form a new company, Knoa Pharma. Knoa Pharma will develop and distribute opioid-addiction-treatment and overdose-reversal medicines at no profit and will also continue Purdue Pharma’s pipeline and existing commercial products, which includes restricting the promotion of opioid products. Knoa Pharma will commence doing business once Purdue’s plan of reorganization becomes effective.
Knoa Pharma will be ultimately owned by a trust that will be established to fund opioid-crisis-abatement efforts in satisfaction of the claims brought by states and localities as well as an opioid-abatement trust established for the benefit of Native American tribes. Proceeds will also flow to opioid-abatement trusts established for the benefit of other creditors such as hospitals, schools, and children with a history of neonatal abstinence syndrome and their guardians, and to a fund for the benefit of personal injury victims. Knoa Pharma will be governed by new independent board members, and the Sackler family will have no involvement in Knoa Pharma.
Source: Purdue Pharma