Purdue Challenged Over Attempt to Pay $38 Million in Bonuses
Purdue and the Sacklers have been accused of triggering the opioid crisis with aggressive and deceptive marketing of OxyContin.
(Bloomberg) -- Purdue Pharma LP’s push to pay executives $38 million while it’s in bankruptcy was challenged by two dozen states, as the Connecticut attorney general called it “morally repugnant.”
The states on Thursday joined an objection filed earlier by the U.S. trustee assigned to the case. That filing argued that Purdue and its billionaire owners, the Sackler family, failed to give enough detail to justify the payments, including whether any of the recipients engaged in misconduct tied to marketing of the addictive painkiller OxyContin.
Purdue and the Sacklers have been accused of triggering the opioid crisis with aggressive and deceptive marketing of OxyContin that reaped billions of dollars in profit. The company and family deny wrongdoing. The states filed their opposition after Purdue asked the bankruptcy court to approve the payouts to cover bonuses, incentives and severance plans.
“Every last cent of that money must be used to combat the opioid epidemic -- on addiction science, treatment and recovery,” William Tong, the attorney general in Purdue’s home state of Connecticut, said in a statement. “Purdue has given next to no information as to who these bonus payments would benefit, and why these gratuitous payments should be allowed under bankruptcy code.”
Josephine Martin, a spokeswoman for the Stamford, Connecticut-based company, said the payments are needed to support operations.
“These programs are essential to retaining employees who are critical to preserving the value of the company for the ultimate benefit of the American public,” she said in a statement. “Denying people who are doing important work under extremely challenging conditions their fair compensation would cause them to leave and destroy the value of the company, which will benefit no one.”
Purdue filed for bankruptcy protection from creditors last month to deal with more than 2,600 lawsuits. The company has proposed a settlement valued at $10 billion that about half the states have agreed to. Bankruptcy judges regularly grant requests for payments and bonuses to employees to encourage them to keep working and avoid an exodus of top talent.
To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net
To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Steve Stroth, Peter Jeffrey
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