Purdue Pharma files for bankruptcy as part of settlement

After bankruptcy filings are complete the company estimates it will provide more than $10 billion in funding to address the opioid crisis which will include settlements with 24 state attorneys general, officials from five U.S. territories and the multi-district litigation, the statement said.

"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", said Steve Miller, chairman of Purdue's board of directors, in a statement to NPR.

The company, owned by the billionaire Sackler family, is accused of playing a damaging role in spurring the opioid crisis through the sale of drugs like painkiller OxyContin.

Those states have opposed a draft agreement reached on Wednesday between the Sacklers and Purdue Pharma and the almost two dozen states and thousands of local governments that are challenging them in court. But the plaintiffs in the suits argue that company officials intensively marketed opioids and downplayed their addictive risks, laying the groundwork for the opioid crisis, which has claimed tens of thousands of lives and has been declared a national emergency. He described bankruptcy proceedings as the "best hope for finalising and implementing a global resolution to this litigation". "It is our hope the bankruptcy reorganisation process that is now underway will end our ownership of Purdue and ensure its assets are dedicated for the public benefit", the family said.

The company, which makes OxyContin and other drugs, filed court papers in NY on Sunday seeking Chapter 11 bankruptcy protection.

As part of the settlement, the company says it will potentially contribute millions of addiction treatment drugs to the public at no or low cost, such as nalmefene and naloxone.

Purdue values the drugs at US$4.45 billion over a decade, the people familiar with the matter said.

The bankruptcy announcement comes several days after the Sackler family behind the controversial drug maker reached a tentative multi-billion-dollar settlement with 23 states, which envisages it paying the sum over seven years while not admitting guilt.

While she has not received all the information requested, James said in a statement: "Records from one financial institution alone have shown approximately $1 billion in wire transfers between the Sacklers, entities they control and different financial institutions, including those that have funneled funds into Swiss bank accounts".

He allegedly used shell companies "to shift Purdue money through accounts around the world and then hide it in at least two separate multi-million-dollar real estate investments back here in NY, sanitised (until now) of any readily detectable connections to the Sackler family", a lawyer in Ms James' office said in one of the court filings.

But some states remain opposed to the proposed settlement.

Purdue, meanwhile, plans to ask a bankruptcy judge to halt active litigation so it can negotiate a final settlement, the people said.

The much-anticipated filing aims to help the company to shield itself from 2,600 lawsuits, including from 26 states.

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