Purdue Pharma L.P. to Begin Soliciting Votes for its Broadly Supported Chapter 11 Plan of Reorganization
STAMFORD, Conn.--(BUSINESS WIRE)--Purdue Pharma L.P. today announced that the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) has approved, among other things, the adequacy of Purdue’s disclosure statement (the “Disclosure Statement”) filed in connection with its chapter 11 plan of reorganization (the “Plan”). With this approval, Purdue may now begin providing ballots and information to over 600,000 claimants. A hearing to consider confirmation of the broadly supported Plan by the Bankruptcy Court is currently scheduled to commence on August 9, 2021.
“Approval of the Disclosure Statement and commencement of the solicitation period is the next key milestone toward approval of Purdue’s historic Plan of Reorganization, which has the potential to improve public health by speeding resources to communities and individuals affected by the opioid crisis,” said Steve Miller, chairman of Purdue’s Board of Directors. “That is what we have been working toward since the 2019 bankruptcy filing.”
Purdue’s Plan has broad creditor support from many state Attorneys General, the Ad Hoc Committee of Governmental and Other Contingent Litigation Claimants, the Multi-State Governmental Entities Group, the Native American Tribes Group, the Official Committee of Unsecured Creditors, the Ad Hoc Group of Individual Victims, the Ad Hoc Group of Hospitals, the Third-Party Payor Group, the Ratepayer Mediation Participants, and the NAS Committee representing caregivers and children affected by Neonatal Abstinence Syndrome. This level of support is unprecedented in scope.
The Plan would transfer billions of dollars of value into trusts for the benefit of the American people. The single largest recipient of funds under the Plan would be the National Opioid Abatement Trust (NOAT), a newly formed entity created to satisfy the claims of state and local governments. NOAT would receive billions of dollars, and those funds would be exclusively dedicated to programs designed to abate the opioid crisis. NOAT and an abatement trust established to satisfy claims asserted by Indian Tribes and Tribal Organizations (the “Tribe Trust”) would together indirectly own 100% of the new company. An initial cash distribution from the company of more than $500 million will be made immediately upon emergence from bankruptcy.
Plan of Reorganization Highlights
- The vast majority of proceeds will be used to abate the opioid crisis; these funds cannot be diverted to other purposes.
- The Plan will deliver more than $10 billion in value, including providing, at cost, millions of doses of opioid addiction treatment and overdose reversal medicines.
- Purdue will be dissolved. After emergence from Chapter 11, its operating assets will be transferred to a newly formed company with a public-minded mission of addressing the opioid crisis. The new company will be held to the highest standards of conduct, including a prohibition restricting the promotion of opioid products to healthcare professionals.
- The new company will ultimately be owned by a new National Opioid Abatement Trust established for the benefit of the American people. State and local governments will neither own, nor operate the new company.
- The Sackler families currently have no role in Purdue and will have no involvement in the new company, and will end their involvement in pharmaceutical companies worldwide. Under the Plan, the Sackler families have agreed to pay $4.275 billion, in addition to the $225 million previously paid to the United States to resolve civil claims, for a total settlement of $4.5 billion.
The voting package includes the following:
- A legal notice advising parties of the date of the hearing to consider confirmation of the Plan, which is currently scheduled to commence on August 9, 2021;
- The Bankruptcy Court's order approving Purdue’s Disclosure Statement and voting materials and procedures;
- Purdue’s court-approved Disclosure Statement and its full Plan;
- A detailed letter of support from the Official Committee of Unsecured Creditors; and
- A ballot to vote to accept or reject Purdue’s Plan and a return envelope with prepaid postage.
Holders of record of claims in voting classes as of March 10, 2021 (or their counsel) will receive a ballot and may vote on the Plan.
The Bankruptcy Court has set a voting deadline of July 14, 2021 for eligible stakeholders. The Plan is subject to confirmation by the Bankruptcy Court. This release is not intended as a solicitation of a vote on the Plan.
Parties may vote electronically, by mail or hand delivery as described below. Ballots can be submitted in the following ways:
- If by E-Ballot: Visit https://restructuring.primeclerk.com/purduepharma and click on the “Submit E-Ballot” link. Log-in credentials will be on the ballot.
- If by standard or overnight: Purdue Pharma Ballot Processing c/o Prime Clerk, LLC One Grand Central Place, 60 East 42nd Street, Suite 1440, New York, NY 10165
- If by hand delivery: Purdue Pharma Ballot Processing c/o Prime Clerk, LLC One Grand Central Place, 60 East 42nd Street, Suite 1440, New York, NY 10165. Please email email@example.com at least 24 hours in advance to arrange delivery.
Questions about voting procedures or packet materials can be directed to Prime Clerk at (844) 217-0912 (domestic toll-free) or (347) 859-8093 (if calling from outside the U.S. or Canada). Additional copies of the Plan, Disclosure Statement, or other solicitation documents, can be obtained by calling the numbers above or visiting Purdue’s restructuring website at restructuring.primeclerk.com/purduepharma or writing to Purdue Pharma Ballot Processing, 60 East 42nd Street, Suite 1440, New York, NY 10165 or firstname.lastname@example.org
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.
The company seeks to achieve a global bankruptcy settlement that would deliver more than $10 billion in value, including 100% of Purdue’s assets and millions of doses of opioid addiction treatment and overdose reversal medicines, to communities across the country to fund programs specifically for abatement of the opioid crisis. The bankruptcy settlement will also deliver funds to private abatement trusts for the benefit of personal injury claimants.
If Purdue’s settlement is approved, Purdue’s assets will be transferred to a new company. This new company will be governed by new independent board members, and will operate in a responsible and sustainable manner taking into account long-term public health interests relating to the opioid crisis. The company will 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.