The $7.5 billion opioid settlement involving Purdue Pharma took a major step forward Nov. 14 after the U.S. Bankruptcy Court for the Southern District of New York said it will confirm the company’s reorganization plan.
The plan had been pending since March, when all 50 states, U.S. territories and the District of Columbia backed the deal. At the time, the agreement still required court approval and compliance with a 2024 U.S. Supreme Court decision that barred nonconsensual legal releases for the Sackler family.
In the wake of the court’s confirmation, Purdue’s bankruptcy will conclude after six years, allowing distributions to begin. The Sackler family will contribute up to $7 billion — including a $1.5 billion upfront payment — with up to $865.8 million allocated for individual victim compensation, according to court documents.
Under the agreement, Purdue will be dissolved and its assets transferred to Knoa Pharma, a new nonprofit organization that will manufacture opioid rescue and treatment medications. The Sacklers will have no role or ownership in the new organization.
The court also affirmed that individual creditors can decide whether to release direct claims against the Sacklers — a key provision that aligns the plan with the Supreme Court’s ruling.
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