Purdue Pharma, maker of OxyContin, to stay in business despite bankruptcy file
A judge cleared the way Tuesday for OxyContin maker Purdue Pharma to stay in business while it pursues bankruptcy protection and settlement of more than 2,600 lawsuits filed against it in a reckoning over the opioid crisis.
At the first court hearing since the Chapter 11 filing late Sunday, Purdue lawyers secured permission for the multibillion-dollar company based in Stamford, Connecticut, to maintain business as usual — paying employees and vendors, supplying pills to distributors, and keeping current on taxes and insurance.
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Purdue’s bankruptcy filing has effectively frozen all litigation against the company, which its lawyers said has been spending more than US$250 million a year on legal and professional fees, but it has not stopped lawsuits against the Sacklers from moving forward.
New York Attorney General Letitia James, who is suing the Sacklers and opposes the proposed settlement, said last week that her office found that members of the family used Swiss and other accounts to transfer US$1 billion to themselves.
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Drain, the judge, also allowed the company to continue covering legal fees for current and former employees, which Vonnegut estimated. Wouldn’t exceed US$1.5 million per month. The company stopped covering legal fees for members of the family on March 1, he said.
“We swear up and down that no payments will go to the Sacklers,” Vonnegut said.
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Purdue lawyers argued that the sign-on and retention bonuses were vital to attracting and keeping top talent in a tumultuous. Time for the company. Covering employee legal fees is important to morale and sends a strong signal that the company backs the people who. Work for it, the lawyers said.
Bankruptcy trustee Paul Schwartzberg objected, saying the bonuses went “way beyond” normal compensation and were padding the pockets of employees who. Already make upward of US$300,000 a year.
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