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Under the smash of thousands of lawsuits, Purdue filed for bankruptcy restructuring in September 2019, automatically suspending all claims against it.

Nearly two years later, bankruptcy court judge Judge Robert Drain in White Plains, NY approved a plan that was approved by a majority of the creditors who voted. Purdue would officially dissolve and re-emerge as a new company called Knoa Pharma, which would still manufacture other drugs besides OxyContin. Profits from the new company will go to states and communities to fund opioid treatment and prevention efforts.

The Sacklers would give up their ownership, eventually selling off their foreign pharmaceutical companies, and donating $4.5 billion of their fortunes to government and local opioid reduction funds.

In return, all lawsuits against Purdue would be extinguished, a typical advantage of bankruptcy. What made the deal so contentious was that the Sacklers insisted on being released from all opioid claims related to Purdue, even though they had not personally filed for bankruptcy.

Lawyers in court said there were more than 800 cases named after Sacklers.

After Judge Drain approved the plan, it was immediately appealed by the United States Board of Trustees, a branch of the Justice Department that monitors bankruptcy cases; eight states, including Maryland, Washington, and Connecticut; District of Columbia; and about 2,000 people. The appeal was brought to the federal district court.

Lawyers who opposed the plan argued that Sacklers was essentially toying with the bankruptcy system. They also argued that Judge Drain did not have the power to shut down a state’s ability to pursue Sacklers under its own civil consumer protection laws.

“Today’s decision is a critical development that restores the state’s ability to protect the safety of Marylanders by holding accountable those who created or contributed to the opioid crisis, particularly members of the Sackler family,” said Maryland Attorney General Brian E. Frosh. .