Purdue to pay states’ legal fees and urged to help opioid victims

Purdue Pharma LP, which produces OxyContin, has received court approval to reimburse millions of dollars in legal fees for states that backed its proposed $10 billion settlement of opioid lawsuits, but with a condition meant to help victims of the addiction crisis, Reuters has reported.

According to the report, Purdue had told Bankruptcy Judge Robert Drain that paying the fees for seven firms that work on behalf of states and local governments would help bring structure to its Chapter 11 case and resolve it quickly.

Drain reportedly said he wanted reimbursement of the fees for four law firms, a financial adviser and two economic consultants conditioned on the parties reaching a deal on the quick release of emergency funds for victims.

Purdue proposed a $200 million emergency fund last month that could be spent quickly on addiction treatment while the parties resolve the bankruptcy case, which will take months. The company has reportedly said the money has been tied up by disagreements among states, local governments and other parties over how to spend it.

Scott Bickford, who represents guardians of children born with neonatal abstinence syndrome caused by opioid exposure in the womb, urged Drain to reject the reimbursement request, the report continued.

“It’s difficult for me to explain to my constituents why states and government authorities which have the funds to pay lawyers get their fees paid when it could be used for a hospital,” Bickford said in the report. “We think it sends the wrong message to victims of the opioid crisis.”

Purdue filed for bankruptcy in September in the face of the lawsuits alleging it helped fuel the opioid crisis by playing down the addiction risks of its painkillers, which the company has denied. It entered bankruptcy with a framework settlement it has said is worth $10 billion.

As governments perform due diligence on the settlement, Purdue will reimburse their reasonable fees, the report said, which could reach $20 million.