Sept. 16 (UPI) -- Purdue Pharma, the pharmaceutical manufacturer widely accused of fueling the ongoing opioid crisis for profit, filed for Chapter 11 bankruptcy as part of an agreement to resolve thousands of state and federal lawsuits against the company.
The OxyContin maker said Sunday it reached an agreement in principle to settle the ongoing suits with 24 state attorneys general and more than 2,000 local governments with filing for bankruptcy key to restructuring the company to implement the deal's framework.
Under the filing, the company will be reorganized under bankruptcy as "NewCo," which will be overseen by a board selected by the claimants with the purpose of using the new company to help alleviate the ongoing opioid crisis Purdue is accused of inflaming.
The settlement also states that all of Purdue's assets, valued at about $10 billion, will go into a trust "for the benefit of claimants and the American people," the company said in a statement.
The Sackler family, which owned the company, will also forfeit a minimum of $3 billion to the trust with the potential of more funds depending on the sale of their business, it said.
"NewCo" will also be contributing tens of millions of doses of opioid overdose reversal medication and additional treatment while being prohibited from "injunction relief," including restrictions on marketing to sell opioids.
"This unique framework for a comprehensive resolution will dedicate all of the assets and resources of Purdue for the benefit of the American public," said Steve Miller, chairman of Purdue's Board of Directors. "This settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation, and instead will provide billions of dollars and critical resources to communities across the country trying to cope with the opioid crisis."
In a statement Sunday, the Sackler family said they have "deep compassion for the victims of the opioid crisis" and believe this framework is a "historic step" toward solving the public health situation.
"It is our hope the bankruptcy reorganization process that is now underway will end our ownership of Purdue and ensure its assets are dedicated for public health," the family said. "This process will also bring the thousands of claims into a single, efficient forum where the settlement can be finalized, reviewed by the bankruptcy court to ensure it is fair and just and then implemented."
However, some attorneys general have opposed the deal because it doesn't require the Sackler family to admit guilt in the opioid epidemic.
When details of the deal were first reported last week, Pennsylvaia Attorney General Josh Shapiro called the agreement "an insultingly weak offer" that allows the Sacklers to walk away with billions of dollars "without admitting wrongdoing." North Carolina Attorney General Josh Stein said he plans to sue the family directly.
The Sackler family said Sunday they are "hopeful" all plaintiffs will come to agreement.
"We are hopeful that in time, those parties who are not yet supportive will ultimately shift their focus to the critical resources that the settlement provides to people and problems that need them," the family said. "We intend to work constructively with all parties as we try to implement this settlement."