Opioid Crisis Purdue Bankruptcy

Massachusetts Attorney General Maura Healey, right, faces reporters as Mass. Gov. Charlie Baker, left, looks on during a news conference, in Boston on Thursday, about the Purdue Pharma bankruptcy case. More than a dozen states have dropped their objections to OxyContin maker Purdue Pharma's reorganization plan.

Don't miss the big stories. Like us on Facebook.  

MONTPELIER — Only nine states and the District of Columbia remain opposed to OxyContin maker Purdue Pharma's plan to reorganize into a new entity that helps combat the U.S. opioid epidemic, and Vermont is one of them.

Vermont Attorney General T.J. Donovan on Thursday said the agreement, filed in federal court, allows the family to walk away from states' legal claims against them with billions in assets, while states are still on the hook for the damage caused by opioid addiction. 

"I do not support the proposed Purdue Pharma bankruptcy plan because it does not sufficiently hold the Sackler family accountable," Donovan said Thursday in a press release. 

"Through this bankruptcy plan, the Sacklers are leveraging their enormous wealth to obtain the protection of the bankruptcy court by having the court extinguish the states’ claims against the Sacklers," Donovan said.

Donovan's statement reiterating Vermont's opposition to the plan came as 15 more state attorneys general said they would support it, including two of Vermont's neighbors, Massachusetts and New York. 

The agreement from multiple state attorneys general, including those who had most aggressively opposed Purdue's original settlement proposal, was disclosed late Wednesday night in a filing in U.S. Bankruptcy Court in White Plains, N.Y. It followed weeks of intense mediations that resulted in changes to Purdue's original exit plan.

The new settlement terms call for Purdue to make tens of millions of internal documents public, a step several attorneys general, including those for Massachusetts and New York, had demanded as a way to hold the company accountable.

Attorneys general for both states were among those who agreed to the new plan, joining about half the states that had previously approved it.

The support from additional states comes less than two weeks before the deadline to object formally to Purdue's reorganization plan and about a month before a hearing on whether it should be accepted. That support makes it more likely the federal bankruptcy judge will confirm the deal.

Asked if the deal would still be in effect in Vermont if the state does not sign on, Charity Clark, Donovan's chief of staff, said it's too soon to tell. 

"We definitely believe that by not consenting, we will maximize Vermont's recoveries," Clark said.

Under the current plan, Vermont would receive three-tenths of 1 percent of the available funds recovered by the sale of Purdue Pharma, Clark said. "And keep in mind that our claims in state court against the Sacklers and Purdue Pharma would be extinguished."

In a joint online news conference Thursday, some of the attorneys general who signed on noted that their states are in line to get more money faster to fund drug treatment and prevention.

But they continued to express ire with the company and especially members of the wealthy Sackler family who own the company and have not accepted any blame. "No one is happy with the settlement," New York Attorney General Letitia James said. "Can the Sacklers do more? Hell yeah, they can do a lot better, but it should first begin with an apology."

North Carolina Attorney General Josh Stein noted Thursday that the deal includes about $1.5 billion more than it initially did.

In a statement, members of the Sackler family called the support of more states "an important step toward providing substantial resources for people and communities in need."

Still, nine states and the District of Columbia did not sign on.

 "At the end of the bankruptcy, the Sacklers will keep billions of dollars in wealth made from the opioid crisis, a substantial portion of which they are shielding in offshore accounts, and have all claims against them dismissed," Donovan said. "Meanwhile, the states will continue to struggle to abate the crisis the Sacklers caused."

Support our journalism. Subscribe today. →

But Donovan also said he is "heartened by its requirement to create a public repository of Purdue Pharma and Sackler family documents. I hope that making these documents public will allow the true story to be told about how the opioid crisis started and how so many died or have had their lives ruined."

Purdue said in a statement that it will try to build "even greater consensus" for its plan.

Purdue sought bankruptcy protection in 2019 as a way to settle about 3,000 lawsuits it faced from state and local governments and other entities. They claimed the company's continued marketing of its powerful prescription painkiller contributed to a crisis that has been linked to nearly 500,000 deaths in the U.S. over the last two decades.

The court filing came from a mediator appointed by the bankruptcy court and shows that members of the Sackler family agreed to increase their cash contribution to the settlement by $50 million. They also will allow $175 million held in Sackler family charities to go toward abating the crisis.

In all, Sackler family members are contributing $4.5 billion in cash and assets in the charitable funds toward the settlement. They are not admitting any wrongdoing and no court has found any by a family member.

The agreement also prohibits the Sackler family from obtaining naming rights related to their charitable donations until they have paid all the money owed under the settlement and have given up all business interests related to the manufacturing or sale of opioids.

Massachusetts Attorney General Maura Healey, who had been the first attorney general to sue members of the Sackler family, praised the modified deal in a statement early Thursday. She pointed to the $90 million her state would receive and the way the company could waive attorney-client privilege to release hundreds of thousands of confidential communications with lawyers about its tactics for selling opioids and other matters.

"While I know this resolution does not bring back loved ones or undo the evil of what the Sacklers did, forcing them to turn over their secrets by providing all the documents, forcing them to repay billions, forcing the Sacklers out of the opioid business, and shutting down Purdue will help stop anything like this from ever happening again," Healey said.

Purdue's plan also calls for members of the Sackler family to give up ownership of the Connecticut-based company as part of a sweeping deal it says could be worth $10 billion over time. That includes the value of overdose-reversal drugs the company is planning to produce.

Money from the deal is to go to government entities, which have agreed to use it to address the opioid crisis, along with individual victims and their families.

Most groups representing various creditors, including victims and local governments, had grudgingly supported the plan. But state attorneys general until now were deeply divided, with about half of them supporting the plan and half fighting against it.

The attorneys general who had opposed the plan said they didn't like the idea of having to rely on profits from the continued sale of prescription painkillers to combat the opioid epidemic. The revised deal lets state and local governments opt out of receiving those funds. Attorneys general also said the deal didn't do enough to hold Sackler family members accountable or to make public documents that could help explain the company's role in the crisis.

Activists also dislike it, and two Democratic members of Congress have asked the U.S. Department of Justice to oppose it. Reps. Carolyn Maloney of New York and Mark DeSaulnier of California said in a statement Thursday that allowing Sackler family members "to obtain legal immunity through Purdue's bankruptcy would be a tragic miscarriage of justice." The Justice Department has not weighed in.

Last year, the company pleaded guilty to federal criminal charges and agreed to pay $225 million to the federal government.

In a separate civil settlement announced at the same time, Sackler family members agreed to pay the federal government $225 million, while admitting no wrongdoing.

The opioid crisis includes overdoses involving prescription drugs as well as illegal ones such as heroin and fentanyl. Purdue's bankruptcy case is the highest-profile piece of complicated nationwide litigation against drugmakers, distribution companies and pharmacies.

Trials against other companies in the industry are playing out in California, New York and West Virginia, and negotiations are continuing to settle many of the claims.

The Associated Press contributed to this report. 

Greg Sukiennik covers Vermont government and politics for Vermont News & Media. Reach him at gsukiennik@reformer.com.

Greg Sukiennik has worked at all three Vermont News & Media newspapers and was their managing editor from 2017-19. He previously worked for ESPN.com, for the AP in Boston, and at The Berkshire Eagle in Pittsfield, Mass.