Purdue Bankruptcy Plan, Sackler Settlement Clear Legal Hurdles

Purdue Pharma LP’s years-in-the-making bankruptcy plan and multibillion-dollar settlement with the drugmaker’s Sackler family owners is legally sound, a judge ruled.

The OxyContin manufacturer, blamed for helping fuel a nationwide opioid addiction crisis, has met all legal requirements to confirm a Chapter 11 plan that will pay at least $7.4 billion to creditors, Judge Sean H. Lane of the US Bankruptcy Court for the Southern District of New York ruled Tuesday.

The plan, which incorporates more than $6.5 billion worth of settlements with Sackler family members, “is not perfect” but hopefully offers at least a “modest amount of relief” for victims of opioid addiction, Lane said in a formal bench ruling following his statement last week that he would approve the proposals.

He overruled a handful of objections filed by individuals who represented themselves at trial.

“My heart goes out to those who have suffered,” he said.

Purdue filed for bankruptcy in 2019 to address thousands of lawsuits related to its mass marketing and production of addictive painkillers. The proceedings drew more than $40 trillion in claims asserted by state and local governments, medical providers, school systems, tribes, and personal injury victims.

The company in 2021 won bankruptcy court approval of a plan that forced all creditors to release legal claims against the Sacklers, setting off a lengthy appeal process that concluded last year when the US Supreme Court barred releases for third parties without creditor consent in Chapter 11 cases.

Following months of renewed negotiations, Purdue advanced an amended plan earlier this year with enhanced contributions from the Sacklers. Over 99% of voting creditors supported the updated agreement, which gave creditors the opportunity to opt out of releasing claims against company owners and others in exchange for a smaller settlement distribution.

Funds will largely be used to enhance nationwide opioid abatement efforts, while roughly $850 million will be used to compensate individuals and families with addiction-related claims.

Additionally, the plan will create a publicly available repository comprised of tens of millions of documents culled from decades of legal proceedings related to Purdue’s business.

The plan further calls for the transfer of Purdue’s business assets to a public benefit company that will develop and distribute opioid overdose reversal and addiction treatment medications.

The company is represented by Davis Polk & Wardwell LLP. The unsecured creditors’ committee is represented by Akin Gump Strauss Hauer & Feld LLP.

The case is In re Purdue Pharma LP, Bankr. S.D.N.Y., No. 19-23649, hearing 11/18/25.