Purdue Pharma announced that its Chapter 11 Plan of Reorganization received support from more than 99% of voting creditors, based on preliminary voting results. The votes were calculated by Kroll, Purdue’s court-authorized solicitation and balloting agent.
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“The high level of support for this Plan is gratifying after years of intense work with our creditors to craft a settlement that maximizes value for victims and communities and puts billions of dollars to work for the public good,” said Purdue’s Board Chairman Steve Miller. “Following the outcome of this vote, we are focused on preparing for the confirmation hearing and ultimately the emergence of a new company with a public minded mission.”
The new Plan settles all civil claims against Purdue, as well as Purdue’s civil claims against the Sacklers. Consistent with the Supreme Court’s Harrington decision, each creditor can decide whether or not to settle and release any direct claims they hold against the Sacklers. That process remains ongoing.
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Assuming full creditor participation, the Plan will deliver approximately $7.4 billion in cash to creditors, with a potential to increase of up to $500 million based on the sale proceeds of the Sacklers’ international pharmaceutical businesses. Additional recoveries are also expected from insurance and litigation pursued by the bankruptcy estate. Of the total cash recovery, the Sacklers will contribute up to $6.5 billion, beginning with a $1.5 billion payment on the Plan’s effective date.
In addition to providing billions of dollars in cash to creditors, the Plan will generate substantial further value by creating a new company with a public-minded mission. The new company (Knoa Pharma) will provide millions of doses of lifesaving opioid use disorder treatments and overdose reversal medicines at no profit.
Purdue’s Plan is the only opioid settlement to date that meaningfully compensates individual victims. As outlined in the Disclosure Statement, the Plan may direct up to $850 million to compensate individual victims.
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Source- businesswire
