Prime Highlights: 

The company filed a $7.4 billion plan to resolve lawsuits related to its OxyContin medication, which contributed to the U.S. opioid addiction crisis. 

The new bankruptcy plan includes specifics on how the settlement funds will be distributed to harmed states, local governments, and individuals.  

Key Background: 

Purdue Pharma’s ongoing bankruptcy proceedings have entered a critical stage with the filing of a new $7.4 billion plan aimed at resolving the thousands of lawsuits alleging the company’s OxyContin pain medication fueled the opioid addiction crisis in the United States. This development marks a significant chapter in a complex bankruptcy that has been the subject of numerous appeals, including a U.S. Supreme Court ruling that blocked a previously proposed $6 billion settlement, which would have also shielded Purdue’s wealthy Sackler family owners from civil liability. 

The legal journey has led to substantial legal fees, especially for the firm handling Purdue’s bankruptcy case, Davis Polk & Wardwell LLP. Since the company’s Chapter 11 filing in 2019, Davis Polk has been paid or has requested more than $250 million in fees. Court filings reveal that a U.S. bankruptcy judge has already approved $246 million for the firm’s work. Additionally, Davis Polk has requested another $12.2 million for services rendered between September 2024 and January 2025. 

The billing rates are notable, with lead attorney Marshall Huebner’s hourly rate set at $2,645, while associates have rates up to $1,780, and law clerks charge $1,065. This hefty fee structure is reflective of the high costs associated with large corporate bankruptcies, where top law firms often command premium hourly rates. The company’s newly proposed bankruptcy plan outlines how the settlement funds will be allocated to individuals, local governments, and states affected by the opioid epidemic. Purdue is set to begin seeking votes and opt-in decisions from creditors in May, before finalizing the plan in court.