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But the new settlement still faces two potential hurdles. Even if bankruptcy judge Judge Drain signs off, the US Court of Appeals for the Second Circuit has to approve the plan, which would formally reverse the December decision that rejected the previous plan.
A key component of the settlement, Sacklers’ immunity shield from civil litigation is debated by the US Trustee’s program, which acts as a watchdog over the bankruptcy system. The Justice Department did not seek comment on whether it would continue to pursue this case.
Purdue’s name will be changed under the deal Knoa Pharmaceuticals and overseen by a public board. restructured company, to contribute $1.5 billion to fund plaintiffs’ programs through 2024, and even more as the company evolves into a drugmaker for addiction reversal and treatment, among other drugs, including OxyContin.
Sacklers’ shield against lawsuits was a major issue for states that opposed the plan. The District of Columbia and nine states—California, Connecticut, Delaware, Maryland, New Hampshire, Oregon, Rhode Island, Vermont, and Washington—voted against the previous proposal, arguing that under state civil laws they should have the right to pursue Sacklers.
The previous agreement, which included the $225 million federal deal, he had less money but would be paid in roughly nine years. Under the revised plan, Sacklers has 18 years to pay the additional $1 billion.
The opioid crisis continued to deepen as the marathon sessions of negotiations dragged on, with overdoses escalating during the pandemic. The remaining governments’ dilemma was whether to continue pursuing Sacklers in court, a process that could take years with no guarantee of victory, or simply take the money as the cash offer increased.
While all states, and thus their local governments, will receive a larger payout than the original agreement outlined, exempt states will receive even more as a bonus for their resistance. The $750 million set aside to compensate more than 100,000 individual victims and survivors and whose stories helped build government cases will not increase, but states have committed to funding an “opioid survivor trust” specifically for them.
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