Purdue Pharma filed for Chapter 11 bankruptcy in New York Sunday as part of its framework for settling litigation with multiple states and governments.
The maker of the painkiller OxyContin said in a statement that the bankruptcy was the next step in implementing the agreement to pay billions of dollars to the states and local and tribal governments that accuse the pharmaceutical giant of helping to drive the opioid crisis.
The company has denied any wrongdoing.
"This court-supervised process is intended to, among other things, facilitate an orderly and equitable resolution of all claims against Purdue, while preserving the value of Purdue's assets for the benefit of those impacted by the opioid crisis," the company said in a statement, which also offered some details of the company's settlement proposal.
After bankruptcy filings are complete the company estimates it will provide more than $10 billion in funding to address the opioid crisis which will include settlements with 24 state attorneys general, officials from five US territories and the multi-district litigation, the statement said.
"This settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation, and instead will provide billions of dollars and critical resources to communities across the country trying to cope with the opioid crisis. We will continue to work with state attorneys general and other plaintiff representatives to finalize and implement this agreement as quickly as possible," Chairman of Purdue's Board of Directors Steve Miller said in the statement.
The company also plans to create another company called NewCo which will produce medicines to reverse overdoses and continue to develop an OTC naloxone product that they will provide at no or low costs to communities throughout the United States, according to the statement.
The Sackler family, which owns the company, had been in talks for weeks to settle cases brought by more than 2,000 states, counties, municipalities and Native American governments against Purdue Pharma and other opioid companies.
The proposed settlement has not received unanimous support, with many attorneys general opposing it and vowing to continue fighting the company.
'A slap in the face'
Pennsylvania Attorney General Josh Shapiro said Wednesday that the case was "far from over."
"This apparent settlement is a slap in the face to everyone who has had to bury a loved one due to this family's destruction and greed. It allows the Sackler family to walk away billionaires and admit no wrongdoing," Shapiro said in a statement obtained by CNN.
Last week, New York Attorney General Letitia James announced that authorities had discovered that the Sackler family had wired about $1 billion between the owners of Purdue Pharma, the entities they control and different financial institutions.
The New York attorney general's office is trying to determine how much money the Sacklers have and where that money is.
Millions of dollars in wire transfers involving Mortimer D.A. Sackler, a former Purdue board member were discovered.
In a written statement to CNN, a spokesperson for Sackler said "there is nothing newsworthy about these decade-old transfers, which were perfectly legal and appropriate in every respect.
"This is a cynical attempt by a hostile AG's office to generate defamatory headlines to try to torpedo a mutually beneficial settlement that is supported by so many other states and would result in billions of dollars going to communities and individuals across the country that need help," the statement said.
Sackler was involved in 137 wire transfers totaling nearly $20 million, and some of those transfers occurred as recently as 2018, the filing indicates.
He received some of those transfers, he redirected "substantial portions of those proceeds" to two other entities that own real estate on his behalf, the document said.
According to the court document, Sackler transferred nearly $40 million to Central Eight Realty LLC, which owns a townhouse in New York on his behalf. A nearly $4 million wire transfer was received by Cherry Tree Holdings LLC, which owns a home in Amagansett, New York on his behalf.
CORRECTION: An earlier version of this story misidentified who provided a written statement to CNN. The statement was provided by a spokesperson for Mortimer Sackler, not Sackler himself.
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