Stamford, Conn. – Today, the U.S. Court of Appeals for the Second Circuit ruled in favor of Purdue Pharma’s chapter 11 Plan of Reorganization (the “Plan”), affirming the bankruptcy court’s September 2021 confirmation order.
“The Second Circuit’s ruling is a victory for Purdue’s creditors, including all 50 states, local governments, and victims who overwhelmingly support the Plan of Reorganization. Our focus going forward is to emerge from bankruptcy and deliver billions of dollars of value for victim compensation, opioid crisis abatement, and overdose rescue medicines,” said Steve Miller, who joined Purdue in mid-2018 as chairman of its Board of Directors. “We have nearly unanimous creditor support earned through productive negotiations and a collective focus on the public good. Our creditors understand the Plan is the best option to provide assistance to those who need it most, the most fair and expeditious way to resolve the litigation, and the only way to deliver billions of dollars in value specifically to fund opioid crisis abatement efforts.”
The Plan is supported by virtually all governmental and non-governmental creditors, including states, local governments, personal injury victims, schools, hospitals, and others. Once consummated, the Plan will deliver billions of dollars of value to fund programs specifically for abatement of the opioid crisis. Upon emergence, Purdue Pharma will cease to exist and a new company, Knoa Pharma, will emerge with a uniquely public-minded mission.
Knoa Pharma Highlights
- Knoa Pharma will be governed by new independent board members selected by the stakeholders. It will operate in a responsible and sustainable manner taking into account long-term public health interests relating to the opioid crisis.
- Knoa Pharma will be subject to operating covenants to ensure that all of its products, including all opioid products, are provided in a safe manner that limits the risk of diversion. It will be held to the highest standards of conduct and required to comply with a detailed injunction (as Purdue is now) restricting the promotion of opioid products. An independent Monitor will continue to ensure that the new company complies with the court-ordered injunction, and will report regularly on compliance.
- Knoa Pharma will develop and distribute opioid addiction treatment and overdose reversal medicines at no profit. It will also continue serving patients and consumers who rely on Purdue’s existing medicines and products, and it will utilize its scientific capabilities to bring to market other potentially life-saving medicines in its pipeline.
- Knoa Pharma will have a diverse portfolio and pipeline of medicines in development that address important medical needs in multiple therapeutic areas such as oncology and central nervous system disorders.
- Knoa Pharma will be ultimately owned by a trust that will be established to fund opioid crisis abatement efforts in satisfaction of the claims brought by states and localities, as well as an opioid abatement trust established for the benefit of Native American Tribes (the “Tribe Trust”). Proceeds will also flow to opioid abatement trusts established for the benefit of other creditors such as hospitals, schools, and children with a history of Neonatal Abstinence Syndrome and their guardians, and to a fund for the benefit of personal injury victims.
- Knoa Pharma will commence doing business once Purdue’s plan of reorganization becomes effective.
- The Sackler families will have no involvement in Knoa Pharma.
For more details on the plan, click here.
About Purdue Pharma L.P.
Purdue Pharma and its subsidiaries develop, manufacture and market medications and consumer health products to meet the evolving needs of healthcare professionals, patients, consumers and caregivers. Once consummated, Purdue’s plan of reorganization will deliver billions in value to communities across the country to fund programs specifically for abatement of the opioid crisis. The Plan will also deliver funds to private abatement trusts for the benefit of personal injury claimants.
Substantially all of Purdue’s assets would be transferred to a new post-emergence company with a public-minded mission. This new company would be governed by new independent board members, and would operate in a responsible and sustainable manner taking into account long-term public health interests relating to the opioid crisis. The company would continue serving patients and consumers who rely on its medicines and products, pursuing its pipeline, and introducing medicines that will help save and improve lives.