PURDUE’S PAINFUL SETTLEMENT. The company would declare bankruptcy and be resurrected as a trust..By Todd Horwitz, Bubba Trading.

 

Purdue Pharma Reaches Tentative Deal

Purdue Pharma, manufacturer of the blockbuster painkiller OxyContin, reached a tentative settlement Wednesday with 23 states and more than 2,000 cities and counties that sued the company over its role in the opioid crisis, according to attorneys involved in the deal.

The executive committee of lawyers representing cities, counties and other groups in a federal lawsuit against Purdue and other drug companies is recommending the deal be accepted. But more than half the state attorneys general in the nation balked, saying they planned to continue pursuing the company and its owners, the Sackler family.

Under terms of a plan negotiated for months, the Sacklers would relinquish control of Stamford, Conn.-based Purdue Pharma and admit no wrongdoing. The company would declare bankruptcy and be resurrected as a trust whose main purpose would be producing medications to combat the opioid epidemic.

Mr. Sackler later withdrew his backing for the foundation—in part because the funds wouldn’t count toward a settlement with states and municipalities suing—while other family members supported the project, according to a person familiar with the matter. The sprawling Sackler family has long been fractious. No Sackler family members still serve on Purdue’s board.

In its statement, Purdue said the plans had the “full support and backing” of the Sacklers and that the company long considered creating a foundation to address the opioid crisis and share scientific information gleaned from the company over the years. Purdue has worked for several years with other organizations to address the opioid crisis, including funding distribution of opioid overdose antidote naloxone.

A spokesperson for the families of Mortimer and Raymond Sackler, the physician brothers who helped start Purdue, said, “Rather than continuing to explore a foundation with limited reach, we are focused on providing far more substantial resources to the patients, families and communities across the country who are suffering and need assistance.”

Mr. Sackler wrote his September 2018 email to other Sacklers, Purdue executives and board members to suggest the content of a potential statement from the family about the opioid crisis. The statement should convey their view that “getting the money out into the local communities hardest hit by this crisis as well as driving the research needed to better understand the underlying causes are both worthy goals,” he wrote.

Todd “Bubba” Horwitz

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Financial Markets and Political Commentary
 

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Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.