The family that owns Purdue Pharma has reportedly rejected calls for $ 4.5 billion of their equity to settle various lawsuits against the opioid maker.
Settlement talks between Purdue Pharma and various states and cities that accused them got stuck last week when officials sought insurance that $ 4.5 billion from the Sackler family would actually be paid.
The breakdown puts the first federal trial on the opioid epidemic on track and starts next month and forms the basis for a complex legal drama involving almost every state and hundreds of local governments.
Purdue, the Sackler family and a group of advocates-general have been trying for months to find a way to prevent litigation and to establish Purdue & # 39; s responsibility for a crisis that has cost 400,000 American lives in the last two decades.
According to lawyers general involved in the discussions, Purdue Pharma is now expected to be declared bankrupt after the settlement talks about the nation's deadly overdose crisis hit an impasse.
An email from the Attorneys General of Tennessee and North Carolina said that Purdue and the Sackler family had rejected two state offers on how payments would be treated under a settlement and that the family refused to make counter-proposals.
The Sackler family who own Purdue Pharma reportedly rejected calls to pay $ 4.5 billion of their equity to settle various lawsuits against the opioid maker. Pictured: Richard Sackler (left) and Jonathan Sackler (right), the children of the late Purdue Pharma co-founder Raymond Sackler
"As a result, negotiations are stalled and we expect Purdue to apply for bankruptcy protection soon," wrote Tennessee Attorney General Herbert Slatery and North Carolina Attorney General Josh Stein in their message sent to update Advocate General throughout the country the status of the calls.
Purdue declined to comment.
In March, Purdue and members of the Sackler family reached a $ 270 million settlement with Oklahoma to prevent a trial of opioid tolls there.
According to a previously proposed settlement, Purdue would enter into a structured bankruptcy that could eventually be worth $ 10 billion to $ 12 billion.
That total would include $ 3 billion from the Sackler family, who would give up control of Purdue and contribute up to $ 1.5 billion by selling another company, Mundipharma, based in Cambridge, England.
Shapiro said the advocates general believed that what Purdue and the Sacklers offered would not have been worth the reported $ 10 billion to $ 12 billion.
In their latest offers, the states also sought more guarantees that the $ 4.5 billion of the Sacklers would actually be paid, according to the announcement that Saturday was distributed with the subject line: & # 39; The Sacklers refused to admit & # 39 ;.
In their message, Tennessee & Slatery and North Carolina & # 39; s Stein said that the states have already begun preparations for bankruptcy proceedings.
& # 39; Like you, we intend to continue our work to ensure that Sacklers, Purdue, and other pharmaceutical companies pay for drug addiction treatment and other remedies to help clean up the mess we claim to be, & # 39 ; they wrote.
Negotiation failure is one of the most confused bankruptcy cases in the country's history.
Purdue, the Sackler family and a group of advocates-general have been trying for months to find a way to prevent litigation and to establish Purdue & # 39; s responsibility for a crisis that has cost 400,000 American lives in the last two decades
It would leave virtually every state and about 2,000 local governments that have sued Purdue in the bankruptcy court for the remaining assets of the company.
Purdue threatened to file for bankruptcy earlier this year and waited while the negotiations continued.
It is not entirely clear what a breakdown in settlement discussions with Purdue means for the Sackler family, who are being sued separately by at least 17 states.
Those lawsuits are likely to continue, but face a major hurdle because it is believed that the family – major donors to museums and other cultural institutions around the world – has transferred most of its millions of fortunes abroad.
Advocate General Josh Shapiro, Pennsylvania, who was one of the four Advocates General negotiating with Purdue and the Sacklers, said on Saturday that he plans to sue the Sackler family, as other states have done.
& # 39; I think they are a group of hypocritical billionaires who lied and cheated so they could make a good profit, & # 39; he said. & # 39; I really believe they have blood on their hands. & # 39;
The nearly 2,000 lawsuits filed by city and county governments – as well as unions, hospitals, Native American tribes and lawyers representing babies born in opioid withdrawal – have been consolidated under one federal court in Cleveland.
Most of those lawsuits also mention other opioid makers, distributors, and pharmacies in addition to Purdue, some of which have pursued their own settlements.
Purdue is also confronted with hundreds of other lawsuits filed with state courts and had sought a broad deal to settle all cases.
The company is the most popular target of national and local governments because of its OxyContin, the prescription pain reliever mentioned by many of the government claims as the drug that triggered the opioid epidemic. The lawsuits claim that the company aggressively sold and marketed OxyContin as a drug with a low risk of addiction, even though it knew it was not true.
The impasse in the talks comes about six weeks before the planned start of the first federal trial under the Cleveland trial, under the supervision of US district judge Dan Polster. That process will hear claims about the toll that the opioid epidemic has taken at two counties in Ohio, Cuyahoga and Summit.
A petition for bankruptcy by Purdue would certainly remove the company from that lawsuit.
The bankruptcy judge would have a wide discretion to go further. This could mean that claims against other drug producers, distributors and pharmacies continue while Purdue's cases are handled separately. Three other manufacturers have already settled in Ohio with the two provinces to avoid the first test.
WHO ARE THE SACKLERS?
The pharmaceutical company of the Sackler family, Purdue Pharma, has earned tens of billions in the sale of opioids, and the Sacklers have spent part of that money on supporting art.
Arthur, a doctor and psychiatrist, founded a research laboratory in 1938, but Arthur was a genius in marketing and he used it to sell a number of drugs, including the anti-anxiety drug, Valium.
He owned a third of Purdue Pharma, which he and his younger brothers Mortimer and Raymond co-founded from a series of smaller companies that they had purchased.
Arthur remained a relatively silent partner in the old Purdue and died in 1987 before it became the company that we now know.
He has never seen any profit from Purdue & # 39; s OxyContin.
He donated the money to open a number of medical education programs, libraries and museums.
After his death in 1987, his brothers bought Arthur & # 39; s portion of Purdue and one of his four children, daughter Elizabeth, largely took over his philanthropic work.
Mortimer was an American doctor and psychiatrist.
He and his brothers, the older Arthur and the younger Raymond, published fruitful medical research before purchasing a number of pharmaceutical companies, including Purdue Pharma in 1952.
After Arthur's death, Mortimer and Raymond bought the share of his offspring in Purdue Pharma, and in 1991 they created the company that would become a pain management giant that we now know.
Mortimer became an exuberant art protector, known for equally extravagant donations and parties, starting in the 1970s.
He died in 2010.
Raymond was a doctor like his older brothers, and the three were partners in all things until each of their deaths.
Raymond found success with Mortimer with their opioid pain reliever, OxyContin, which became the signature drug of Purdue Pharma.
Raymond was milder and more private than his brother, Mortimer.
Raymond had two children, Richard and Jonathan, before his death last year.
Richard Sackler followed in his father's footsteps and obtained his medical degree at the New York University School of Medicine.
He came to Purdue after medical school and led the research and development that eventually yielded the form of extended release of OxyContin that would elevate the family's fortune to previously incomprehensible.
He became president of Purdue in 1991, pioneering marketing campaigns (in the spirit of his uncle, Arthur) that tempted mass & # 39; s medical professionals to buy Purdue & # 39; s opioid.
Richard became co-president in 2003, when $ 1.6 billion was sold in OxyContin.
His marketing plans aroused suspicion and Richard was dropped off in 2015 before his company paid a settlement of $ 24 million.
The company appealed in 2017, but the case did not continue.
In addition to his art philanthropy, Richard & # 39; s foundations have donated to controversial causes, including anti-Muslim groups.
Arthur & # 39; s daughter has publicly and stubbornly tried to distance herself from a branch of her family that has benefited from OxyContin.
Elizabeth is a qualified psychiatrist and a well-known philanthropist.
She is the founder of a center for feminist art of the same name at the Brooklyn Museum in New York.
On Tuesday, she supported Goldin & # 39; s petition and expressed her shame for her uncles' affairs.
Elizabeth Sackler is a patron of the arts and has publicly distinguished herself and her father from her uncles and their company, Purdue Pharma.
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