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Wed Sep 18, 2019, 10:01 PM

Purdue Pharma's bankruptcy plan includes special protection for the Sackler family fortune

The Rachel Maddow Show just reported this.

Related: Purdue Pharma Looks to Extend Bankruptcy Shield to Sacklers (Wall Street Journal)

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Source: Washington Post

Purdue Pharma’s bankruptcy plan includes special protection for the Sackler family fortune

If lawsuits against the wealthy family aren’t halted, the Sacklers ‘may be unwilling—or unable’ to contribute billions to the drug makers bankruptcy as planned, Purdue said in a court filing Wednesday.

By Renae Merle and Lenny Bernstein
September 18, 2019 at 4:38 p.m. EDT

In 2008, as Purdue Pharma was searching for a new chief executive, Richard Sackler received a memo from an adviser.

“In the event that a favorable [recapitalization] deal cannot be structured during 2008, the most certain way for the owners to diversify their risk is to distribute more free cash flow to themselves,” F. Peter Boer, a member of Purdue’s board of directors told Sackler, a prominent member of the wealthy family that owns the company.

That, authorities allege, is exactly what the Sackler family did. A lawsuit filed by the state of Massachusetts claims the Sacklers transferred more than $4 billion from the company to personal accounts between 2008 and 2016. Oregon asserts the family may have taken as much as $10 billion out of the company.

Now, as the maker of OxyContin heads to bankruptcy court, those billions represent a central sticking point in the company’s plan to resolve thousands of lawsuits against it. Purdue asked the bankruptcy judge, Robert D. Drain, on Wednesday to take the unusual step of temporarily halting lawsuits against the Sackler family.

-snip-

Read more: https://www.washingtonpost.com/business/2019/09/18/purdue-pharmas-bankruptcy-plan-includes-special-protection-sackler-family-fortune/

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Reply Purdue Pharma's bankruptcy plan includes special protection for the Sackler family fortune (Original post)
Eugene Sep 18 OP
Gothmog Sep 18 #1
jmowreader Sep 20 #2

Response to Eugene (Original post)

Wed Sep 18, 2019, 11:17 PM

1. This is not typical for a bankruptcy plan

I have doubts if this relief is available

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Response to Gothmog (Reply #1)

Fri Sep 20, 2019, 04:48 AM

2. This is not your typical bankruptcy plan

This is the Agreement in Principle the Sacklers struck with the government:
https://purduepharma.com/restructure/

To settle all the lawsuits in one whack, the Sacklers have agreed:

To contribute all of the assets of Purdue Pharma to a trust or other entity established for the benefit of claimants and the American people;

The new company (“NewCo”) being governed by a new board selected by claimants and approved by the Bankruptcy Court;

NewCo potentially contributing tens of millions of doses of opioid overdose reversal and addiction treatment medications at no or low cost;

NewCo agreeing to be bound permanently by injunctive relief, including marketing restrictions on the sale and promotion of opioids; and

In addition to 100% of Purdue, the Sackler families contributing a minimum of $3 billion, with the potential for substantial further monetary contributions from the sales of their ex-U.S. pharmaceutical businesses.

They estimate this is going to cost the Sacklers $10 billion, PLUS they lose Purdue Pharma and they're forced to divest themselves from any other pharma investment they have and to turn the proceeds from the sale of those investments over to the government.

The reason they filed bankruptcy is that a Chapter 11 filing puts the settlement into motion.

Here's the multibillion-dollar question: If parties that didn't enter into the settlement class sue the Sacklers on their own, is that going to nullify the settlement framework? I'm pretty happy with the settlement as it stands; it effectlvely bars for all time the Sackler family's participation in the pharmaceutical industry. (The feds have done this before, but usually with financial types like Michael Milken.) It also appears to recoup any money they made on drugs that wound up in the black market.

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