The Purdue Bankruptcy

One of the opioid defendants is Purdue Pharma, the developer and manufacturer of Oxycontin and other powerful opioid medications. Purdue’s role in the opioids crisis has been widely reported in newspapers and on television. Purdue declared bankruptcy in September 2019 after being sued by many tribal, state, and local, governments and by other plaintiffs. The case is pending in the bankruptcy court in New York. Upon the filing of the bankruptcy proceeding, all litigation against Purdue was automatically stopped. In addition, the bankruptcy court also entered a stay of litigation that had been filed against members of the Sackler family, who founded and own Purdue.

Over the course of two years of negotiations, major creditor groups (including Tribes) reached an agreement among themselves and with Purdue and the Sacklers on how to restructure the company. The agreement has the following elements:

  • The assets of Purdue—including its cash-on-hand, its factories and other real estate, its insurance policies, and its patents and other intellectual property—will be turned over to the “public creditors,” meaning tribal and state and local governments.
  • The public creditors will own and operate the reorganized Purdue business in the public interest to produce opioid medications only for tightly regulated purposes, as well as opioid treatment medications and other pharmaceuticals, with any profits going to the public creditors. After a short period of time, the public creditors will sell these corporate assets to generate additional cash.
  • In addition, the members of the Sackler family will make a contribution of approximately $5.5 billion over a period of about nine years to a settlement fund for the benefit of the creditors. In exchange, the Sacklers will receive releases from all present and future opioid-related lawsuits (meaning they cannot be sued again).
  • From a settlement fund consisting of the profits of the reorganized Purdue and the Sackler contributions, the public creditors will pay agreed-upon amounts to groups of “private creditors,” including individuals with personal injury claims, hospitals, third-party payors (such as insurance companies) and other private groups with claims against Purdue.
  • After payments to the private creditors, the public creditors will allocate remaining funds among themselves, with federally recognized Tribes receiving an approximately 3 percent share of the total amount going to state and local governments. The total amount that will go to Tribes is estimated to be approximately $150 million over a period of nine years.
  • These funds will be allocated among federally recognized Tribes pursuant to an inter-tribal allocation matrix developed by the lawyers for the Tribes, and reviewed and approved by former federal Judge Layn Phillips. Click here for the Allocation.

The bankruptcy court approved the Purdue restructuring plan in September 2021. However, a group of nine states and the U.S. Trustee (an official within the Department of Justice) objected to the plan and appealed the bankruptcy court’s approval to a federal district court in New York, arguing that the bankruptcy court did not have the authority to grant lawsuit releases to the members of the Sackler family. In December 2021, the district court agreed with the objecting states and the U.S. Trustee, and ruled the plan was improper. Purdue, the Sackler family, and public and private creditor groups that support the restructuring plan appealed the district court decision to the Second Circuit Court of Appeals. A decision on that appeal is expected in the summer of 2022.

Meanwhile, negotiations took place between the nine objecting states and the members of the Sackler family in an effort to resolve the state objections. The Sackler family agreed to give the creditors more money, increasing its contribution to about $5.5 billion. Although the objecting states have now withdrawn their objections to the restructuring plan, the U.S. Trustee has not, so the appeal proceedings in the Second Circuit Court of Appeals continue.


Be sure the Tribal Settlements Administrator, BrownGreer PLC, has your contact information so they know who to contact about wiring funds or mailing a check. Click here to log on to the Portal to check your contact information or