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September 19, 2019

Opposition Mounts to Purdue Pharma’s Bankruptcy Filing

Following a tentative settlement arrangement with many of the state and local governments involved in opioid litigation, Purdue Pharma, LP filed for Chapter 11 bankruptcy on September 15, 2019, to restructure the company and shield itself from protracted and costly legal expenses. The bankruptcy process is being met with fierce opposition from plaintiffs and several states that did not join the settlement arrangement. The basis for their opposition to the settlement deal and the bankruptcy filing is two-fold. First, the settlement agreement would allow Purdue to avoid a potential ruling of fault for the opioid crisis and to continue to conduct business as an opioid manufacturer. Second, the bankruptcy process would stay all other claims being prosecuted by the states who refused to join the settlement arrangement while those jurisdictions that did join the settlement arrangement would benefit from payments measured by Purdue’s continuing business as an opioid manufacturer. The bankruptcy filing now rests with the federal bankruptcy judge.