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Sunday, November 17 Business

CT suit against Purdue Pharma halted for six weeks

STAMFORD — The judge overseeing Purdue Pharma’s bankruptcy agreed Wednesday to a request from Connecticut and about two-dozen other states to limit until Dec. 19 a new pause on their cases, according to the Connecticut Attorney General’s office.

State Attorney General William Tong and 23 of his counterparts have not agreed to a settlement with Purdue and the Sackler family members who own the company and want to use the six-week stay to push the owners to share more financial information. With that halt, Connecticut and the other states would voluntarily adhere during the next month and a half to a broader preliminary injunction, running until April 8, on other pending cases against Purdue that was approved Wednesday by Judge Robert Drain.

“This short-term extension will keep pressure on the Sacklers to disclose their financial information to the states,” Tong said in a statement. “We intend to use every day of this extension to aggressively fight for that information.”

Purdue spokeswoman Josephine Martin said in a statement that the preliminary injunction “will provide the most productive environment to advance the proposed settlement structure in a timely manner while maximizing the value of the company’s assets for the ultimate benefit of the American public. We are pleased with the important progress made to date and we look forward to continued collaborative discussions with all parties aimed at building further support for the settlement.”

In a statement, Sackler family members said that “our family continues to believe that the bankruptcy reorganization process is the most efficient and effective way to reach a settlement that delivers critical resources to the individuals, families and communities most in need. It is our hope that today’s ruling brings us another step closer to that goal.”

Purdue officials were not immediately available to comment.

Drain had approved Oct. 11 an initial stay on the cases until Nov. 6, a move ostensibly aimed at helping to advance settlement negotiations. His ruling responded to Purdue’s and the Sacklers’ proposal to halt for six months the approximately 2,700 pending lawsuits, which allege the company fueled the opioid crisis with deceptive OxyContin marketing.

Also last month, Purdue agreed to put $200 million into a fund in the next six months for efforts to tackle the opioid crisis.

Purdue and its attorneys have argued that a pause to the litigation is needed to preserve the company’s value for a settlement. In its initial bankruptcy filings, Purdue predicted it would spend roughly $263 million this year on legal and related professional costs, comprising its “largest operating expense by far.”

Since Purdue filed for bankruptcy on Sept. 15, Tong has criticized the company’s proposed settlement terms.

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The Sacklers’ prospective cash payout of at least $3 billion anchors Purdue’s proposal. The sale of their international pharmaceutical businesses, namely the United Kingdom-based Mundipharma, could bring in additional billions, but estimates vary about those assets’ value.

Tong argues that the Sacklers — whose family net worth has been estimated at $13 billion — can afford to contribute a much higher amount. He has declined, however, to give a specific number for how much he thinks the Sacklers should pay.

He also asserts that more funds are needed to respond to a crisis that has resulted in more than 5,000 opioid-involved deaths in Connecticut since 2012.

At the same time, Tong has accused the Sacklers of siphoning billions out of Purdue in recent years. Representatives of the Sacklers have responded that the owners have not committed any financial malfeasance.

Purdue’s proposed terms call for the restructuring of its business into a trust or similar entity that would be known as NewCo. The successor firm could contribute, for free or at low cost, tens of millions of doses of opioid overdose-reversal medications to cities and states, according to the company’s plan.

The company has not revised its offer, according to Tong. Without adjusted terms, Connecticut and the other states and cities who have not accepted the company’s offer would be unlikely to settle.

pschott@stamfordadvocate.com; 203-964-2236; twitter: @paulschott

Paul Schott|Staff reporter

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