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Plaintiff says company’s bid to exit bankruptcy omits US government plan to seize $225m that should go to victims

A New York bankruptcy judge approved a disclosure statement last week laying out Purdue Pharma’s proposed reorganization plan – despite an objection alleging the disclosure omits information about the US government’s plan to seize Purdue money that could be used to compensate prescription opioid victims under the Mandatory Victims Restitution Act instead.

It’s been five years since Purdue Pharma pleaded guilty to charges of conspiracy in a New Jersey federal court, including for unlawfully dispensing opioid products without a legitimate medical purpose. In a press release at the time, the Department of Justice emphasized that the convictions were part of a strategy to defeat the opioid crisis.

But the plea agreement did not include restitution for opioid victims, reasoning that it would not be “administratively feasible” to distribute the funds. Since then, opioid victims have been unable to seek settlements from Purdue, as the company’s 2019 bankruptcy filing stayed civil lawsuits against the company, and will likely instead be settled in bankruptcy court as part of the reorganization plan.