Purdue Pharma L.P. Files New Plan of Reorganization Providing for More Than $7.4 Billion in Creditor Distributions

Purdue Pharma L.P. (“Purdue”) today filed a Chapter 11 Plan of Reorganization (the “Plan”) and related disclosure statement with the United States Bankruptcy Court for the Southern District of New York. Assuming full creditor participation, the Plan will deliver to creditors more than $7.4 billion of cash, subject to certain reserves, to compensate victims and abate the opioid crisis. There will also be substantial value created by the continued development and distribution of lifesaving opioid use disorder and overdose rescue medicines for no profit, as well as expected insurance and other recoveries.

True to the vision Purdue articulated at the outset of the bankruptcy, a new public benefit company, 100% devoted to improving the lives of Americans, will be created upon emergence. Purdue will be dissolved and its assets transferred to the new company. The Sacklers will have no ownership interest or role with the new company, just as they have had no involvement in Purdue since the end of 2018.

In compliance with the Supreme Court’s 2024 ruling, the Plan does not contain non-consensual third-party releases. Instead, creditors will need to opt in to the settlement to receive their full settlement payments. Alternatively, creditors can preserve their right to take legal action against the Sacklers if they do not opt in to the Sackler releases contained in the Plan.

“Following the 2024 Supreme Court ruling, we doubled down on our commitment to work with our creditors to design a new Plan that delivers unprecedented value to those affected by the opioid crisis. Today’s filing is a major milestone in that effort,” said Purdue Board Chairman Steve Miller. “We and our creditors have worked tirelessly in mediation to build consensus and negotiate a settlement that will increase the total value provided to victims and communities, put billions of dollars to work on day one, and serve the public good. I sincerely thank our stakeholders for their dedication and collaboration, and I look forward to having the plan confirmed and consummated as quickly as possible.”

Plan Value

The cash value of the Plan, assuming full creditor participation and net of certain reserves, is approximately $7.4 billion, including available cash from Purdue and payments by the Sacklers. The number could go higher, with up to an additional $500 million from the Sacklers if the international pharmaceutical businesses they will be required to sell yield proceeds above a certain value. Additional value is also expected from insurance and litigation recoveries that the bankruptcy estate will pursue.

• Assuming full creditor participation, the Sacklers will contribute approximately $6.5 billion in installments over the next 15 years, subject to certain reserves. They will pay $1.5 billion on the day the Plan becomes effective.
• Purdue will contribute 100% of its assets, with an expected $900 million in cash available for distribution on the day of emergence.
• Notably, the Plan is the only opioid settlement to date that meaningfully compensates individual victims. Assuming full participation, individual victims will receive more than $850 million, subject to certain reserves.

In addition to this cash value, the Plan creates a company equipped to provide millions of doses of lifesaving opioid use disorder treatment and overdose reversal medicines.

Structure of Emerging Public Benefit Company

Upon emergence, Purdue will be dissolved. The public benefit company that succeeds it will be owned by an independent, newly created foundation. By charter, its core mission will be to abate the opioid crisis and improve public health.

• The states, with input from other case constituents, will select the initial slate of directors. Creditors will otherwise have no ongoing role in the new company’s operations or governance.
• The post-emergence company will be subject to a strict operating injunction to ensure that it provides its medicines in a safe manner that limits the risk of diversion. This continues Purdue’s current commitment, as the company has operated under a voluntary self-injunction since 2019, with the oversight of a court-appointed monitor.
• The Plan also contains provisions that will ensure that the post-emergence company satisfies Purdue’s obligations to the Department of Justice under the 2020 criminal and civil settlements. Because the new company will be dedicated to abating the opioid crisis, the Plan satisfies the conditions to receive a $1.775 billion forfeiture judgment credit against the $2 billion forfeiture payment that the company would otherwise have to pay to the United States.
• The Sacklers, who exited the Board of Purdue by the end of 2018 and have had no involvement in Purdue since that time, will have no role whatsoever in the new company.

Dedicated to Addressing the Opioid Crisis

The post-emergence company will continue Purdue’s work to abate the opioid crisis, at no profit.

• Since 2018, Purdue has helped develop a low-cost over-the-counter naloxone nasal spray, resulting in dramatic decreases in the cost of naloxone products in the marketplace, thereby improving access and saving lives.
• Purdue has distributed more than 2 million tablets of buprenorphine naloxone sublingual tablets CIII (generic equivalent to Suboxone®) for a penny a tablet to state and local correctional facilities to treat incarcerated people with opioid use disorder. Click here for prescribing information.
• Purdue distributes, at no profit, nalmefene HCl injection for use by healthcare professionals for the complete or partial reversal of opioid drug effects, including respiratory depression induced by either natural or synthetic opioids. Click here to learn more, and here for prescribing information.

Document Repository and Other Injunctive Relief

• The Plan also provides a historic level of transparency. It creates a document repository that will make available to the public millions of documents, including privileged documents, related to Purdue’s historical sales and marketing practices.
• The repository will be significantly larger than the entire tobacco industry repository.
• Supplements to the Plan will contain provisions relating to Sackler naming rights and the sale of the Sacklers’ international companies similar to the provisions contained in the original Plan.

The current terms of the Plan and disclosure statement as filed can be viewed here. The Debtors expect that the new Plan – which is the result of many months of mediation between and among Purdue and its creditors – will receive support from the overwhelming majority of its creditors.

The Plan filed today will be amended or supplemented from time to time and is subject to confirmation by the Bankruptcy Court. A hearing to approve the disclosure statement is currently expected to occur in May 2025. Assuming the Bankruptcy Court approves the disclosure statement, Purdue will commence the solicitation of votes on the Plan and thereafter move to confirmation and emergence.

About Purdue Pharma L.P.

Purdue Pharma and its subsidiaries develop, manufacture and market medications to meet the evolving needs of healthcare professionals, patients, and caregivers. Purdue and its subsidiaries focus on balancing innovative science with clinically effective, compassionate care. The Company’s goal is to serve patients who rely on its medicines, pursue its pipeline of branded and generic medications, and introduce medicines that will help save and improve lives.

For more information, visit www.purduepharma.com.

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