FOLLOW US

A New York bankruptcy judge has approved the Purdue $7.4B Chapter 11 Plan, clearing a path Friday for billions of dollars to begin flowing to communities and victims devastated by the opioid epidemic—an epidemic fueled for years by Purdue Pharma’s marketing of OxyContin.

U.S. Bankruptcy Judge Sean H. Lane closed out the third and final day of the confirmation trial by announcing he would confirm the sweeping plan, promising a detailed bench ruling next Tuesday that explains the reasoning behind the decision.

Billions Headed to Victims as Sackler Deal Anchors Plan

$6.5B Sackler Settlement at the Center of the Deal

At the heart of the plan is a $6.5 billion settlement with the Sackler family, Purdue’s billionaire owners who did not file for bankruptcy but agreed to fund massive trusts for public and private claimants.

Creditors will choose whether to grant releases shielding the Sacklers from future lawsuits. Those who opt in tap into the full recovery pool; those who refuse retain the right to sue individually—but will have access only to a more limited Purdue-based pot of funds.

Purdue, which filed for Chapter 11 in September 2019, has said it faces an almost unfathomable $41 trillion in liability linked to its opioid products. The company will also contribute roughly $900 million in free cash to the settlement trusts.

Supreme Court Ruling Forces Rewrite—and Bigger Payouts

New Plan Complies With Landmark 2024 Decision

This is not Purdue’s first confirmed restructuring plan. In 2021, the bankruptcy court approved a prior proposal that relied on non-consensual third-party releases shielding the Sacklers from lawsuits. But the U.S. Trustee appealed, and the Supreme Court struck down the releases in June 2024, ruling they violate the bankruptcy code.

After months of renewed mediation, the parties returned with a revised plan that bolsters the Sackler contribution and adds an opt-in mechanism to align with the Supreme Court’s ruling. The new structure preserves creditor choice while still offering a unified path to distribute billions nationwide.

Bench Ruling Set for Tuesday

Judge Lane scheduled a 10 a.m. hearing on Tuesday, Nov. 18, to issue the full bench ruling and formally sign off on the order confirming the Purdue $7.4B Chapter 11 Plan.

The ruling is expected to accelerate one of the most consequential mass-tort restructurings in U.S. history—an effort years in the making, forged in the aftermath of a public health catastrophe that touched nearly every corner of the nation.