Purdue Pharma Unveils $7.4 Billion Reorganization Plan to Aid Opioid Victims, Dissolve Company

Purdue Pharma L.P. has filed a sweeping new Chapter 11 Plan of Reorganization with the U.S. Bankruptcy Court for the Southern District of New York. If approved, the plan will distribute more than $7.4 billion in total value, including up to $7 billion from the Sackler family, to help resolve claims related to the opioid crisis and transform Purdue into a nonprofit entity devoted to public health.

Payouts and Sackler Contribution

The plan outlines approximately $2.4 billion in cash distributions available immediately upon plan effectiveness. The Sacklers will contribute $6.5 billion over 15 years, with an initial payment of $1.5 billion on day one. An additional $500 million may be added if the Sacklers’ international business sales exceed specific valuation thresholds.

Assuming full creditor participation, over $850 million is earmarked for direct payments to individual victims—marking the most substantial individual victim compensation of any opioid settlement to date.

New Public Benefit Company: No Sackler Role

Upon confirmation, Purdue will be dissolved and succeeded by a new public benefit company governed by a newly created independent foundation. The Sacklers will have no ownership interest or role in the successor entity. States will select the initial board of directors, and the company will operate under stringent court-enforced regulations to prevent drug misuse.

According to Purdue Board Chairman Steve Miller:

Transparency and Accountability

The plan promises a landmark level of transparency through the creation of a massive public document repository—larger than the tobacco litigation archive—containing millions of documents, including privileged records tied to Purdue’s historic marketing practices.

It also includes terms to satisfy Purdue’s prior $2 billion settlement with the Department of Justice, including a $1.775 billion credit tied to the nonprofit status and mission of the successor company.

Life-Saving Drug Access

The future nonprofit will continue Purdue’s recent work to combat opioid overdose, including:

• Developing low-cost naloxone nasal spray to reverse opioid overdoses.
• Distributing buprenorphine-naloxone tablets to U.S. correctional facilities for a penny each.
• Providing nalmefene HCl injection at no profit to medical providers for opioid reversal.

Legal Compliance and Victim Choice

Complying with the Supreme Court’s 2024 ruling, the plan eliminates non-consensual third-party releases. Creditors can choose to accept their full settlement or retain the right to sue the Sacklers individually if they decline the opt-in settlement offer.

Next Steps in Court

The Bankruptcy Court is expected to hold a hearing to approve the plan’s disclosure statement in May 2025, paving the way for a creditor vote and formal confirmation. The plan is the product of extensive mediation and is anticipated to win support from the vast majority of stakeholders.

More details and the full filing are available on Purdue Pharma’s official press release.