Purdue Judge Signals Comfort With New Narrowed Sackler Releases

(Bloomberg) -- U.S. Bankruptcy Judge Robert Drain on Friday instructed lawyers for Purdue Pharma LP and its owners to “clean up” legal immunities that would be doled out under the drugmaker’s opioid settlement. 

Purdue submitted yet another iteration of bankruptcy plan documents overnight intended to address Drain’s concerns over the scope of releases from opioid liability members of the Sackler family and related entities would receive under the deal. 

Over the course of a trial that began earlier this month, lawyers have repeatedly fiddled with the structure of the releases to give Purdue’s owners broad legal immunity from opioid liability without accidentally releasing them and their associates from unrelated conduct. 

The releases, which have been at the heart of objections to the plan from a handful of U.S. states, have “radically narrowed” during the trial, attorney Marshall Huebner of Davis Polk & Wardwell said during the bankruptcy hearing Friday. 

During the hearing, Drain questioned lawyers on the specific meaning and intent of the legal jargon in the latest plan, prodding on some sections to ensure no “back-door” broadening of the releases existed. “This was, in some sense, a drafting session, because I wanted to make sure there wasn’t ambiguity” in the releases, Drain said. 

Maryland Assistant Attorney General Brian Edmunds, whose state has been fighting the deal, called the latest plan “a step in the right direction” but said it would require further review to ensure it “reaches the level of clarity that we need.”

Drain urged the states still opposing the plan -- about 10 in total, including Washington and Connecticut -- to work toward a settlement with the Sackler family. Continuing to fight the deal through appeals after his ruling will be expensive, time consuming and delays communities hit hard by opioids from getting much-needed funding, he said. 

“The parties are basically left with a choice of resolving their differences now or taking the time and the money to fight thereafter,” Drain said. “Time is no one’s friend.”

Drain expects to rule on whether to approve Purdue’s settlement proposal on Wednesday. 

The bankruptcy case is Purdue Pharma LP, 19-23649, U.S. Bankruptcy Court for the Southern District of New York (White Plains).

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