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OxyContin maker prepares 'free-fall' bankruptcy as settlement talks stall
Source: Reuters
BUSINESS NEWS SEPTEMBER 3, 2019 / 6:03 PM / UPDATED 32 MINUTES AGO
Exclusive: OxyContin maker prepares 'free-fall' bankruptcy as settlement talks stall
Mike Spector, Jessica DiNapoli
6 MIN READ
(Reuters) - OxyContin maker Purdue Pharma LP is preparing to seek bankruptcy protection before the end of the month if it does not reach a settlement with U.S. communities over widespread opioid litigation, three people familiar with the matter said, after some states balked at the company’s $10 billion to $12 billion offer in August to end their lawsuits as part of a negotiated Chapter 11 case.
On Friday, Purdue lawyers had documents prepared for a Chapter 11 filing at a moment’s notice, Reuters has learned. A federal judge, who expects plaintiffs to update him on settlement progress this week, wants 35 state attorneys general on board with a deal, a threshold that has not yet been reached, the people familiar with the matter said.
Purdue lawyers have told lead attorneys for local governments and some state attorneys general for weeks, and again in recent days, that the company will have to file for bankruptcy without a settlement if one is not reached soon, one of the people said. This approach is known as a “free-fall” bankruptcy filing because it lacks consensus on a reorganization beforehand.
Strong opposition from some attorneys general such as those in Massachusetts and New York emerged last week after confidential discussions on Purdue’s settlement talks became public in media reports, with Connecticut’s calling for Purdue to be “broken up and shut down,” and sold in parts. Their main sticking point is how much Purdue’s controlling Sackler family will pay, the people said.
-snip-
Exclusive: OxyContin maker prepares 'free-fall' bankruptcy as settlement talks stall
Mike Spector, Jessica DiNapoli
6 MIN READ
(Reuters) - OxyContin maker Purdue Pharma LP is preparing to seek bankruptcy protection before the end of the month if it does not reach a settlement with U.S. communities over widespread opioid litigation, three people familiar with the matter said, after some states balked at the company’s $10 billion to $12 billion offer in August to end their lawsuits as part of a negotiated Chapter 11 case.
On Friday, Purdue lawyers had documents prepared for a Chapter 11 filing at a moment’s notice, Reuters has learned. A federal judge, who expects plaintiffs to update him on settlement progress this week, wants 35 state attorneys general on board with a deal, a threshold that has not yet been reached, the people familiar with the matter said.
Purdue lawyers have told lead attorneys for local governments and some state attorneys general for weeks, and again in recent days, that the company will have to file for bankruptcy without a settlement if one is not reached soon, one of the people said. This approach is known as a “free-fall” bankruptcy filing because it lacks consensus on a reorganization beforehand.
Strong opposition from some attorneys general such as those in Massachusetts and New York emerged last week after confidential discussions on Purdue’s settlement talks became public in media reports, with Connecticut’s calling for Purdue to be “broken up and shut down,” and sold in parts. Their main sticking point is how much Purdue’s controlling Sackler family will pay, the people said.
-snip-
Read more: https://www.reuters.com/article/us-purdue-pharma-opioids-exclusive/exclusive-oxycontin-maker-prepares-free-fall-bankruptcy-as-settlement-talks-stall-idUSKCN1VO2QN