The United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) today indicated it will approve the Chapter 11 Plan of Reorganization (The “Plan”) for Purdue Pharma L.P. (“Purdue”). The Plan, which achieved remarkable consensus with the support of more than 99% of voting creditors, will deliver billions in urgently needed funding for opioid crisis abatement and victim compensation, as well as rescue medicines that will save lives.

“Today is a landmark day, representing the culmination of a six-year bankruptcy and mediation process,” said Steve Miller, Purdue Board Chairman. “The Plan is the product of intense work with our creditors through a singular, shared focus on delivering as much value as possible to meaningfully address the opioid crisis. We are grateful for the perseverance and herculean efforts of our creditors who worked with us to craft an entirely consensual plan that unlocks billions in recoveries and significant non-monetary benefits.”

The confirmation hearing involved more than 5,000 pages of testimony from nearly 20 fact and expert witnesses, as well as statements and arguments from more than a dozen individuals affected by the opioid crisis. The Bankruptcy Court ultimately indicated it will rule that the Plan satisfies all applicable requirements under the Bankruptcy Code, and that the settlements are fair, equitable, and in the best interests of the creditors. The Court further recognized that the Plan is consistent with the U.S. Supreme Court’s Harrington decision because each creditor can decide whether or not to settle and release any direct claims they hold against the Sacklers.

“Today cements the end of a long chapter, and brings us very near to the end of the book for Purdue,” said Miller. “Soon, Purdue will cease to exist. Knoa Pharma, a new independent company owned by a foundation, will receive valuable assets and expertise from the old company, and will carry forth as a purpose-driven company with the mission to address the opioid crisis. We will now commence the process of satisfying all outstanding requirements for Purdue to emerge from bankruptcy so that resources from the settlements can flow to communities across America as quickly as possible.”

Plan Overview

The Plan will deliver billions in value to abate the opioid crisis and compensate individual victims:

• The Plan will deliver approximately $7.4 billion in cash to creditors, with up to an additional $500 million based on the proceeds from the sale of the Sacklers’ international pharmaceutical businesses.
• Additional cash recoveries are also expected from insurance and other litigation pursued by the bankruptcy estate.
• Of the total cash recovery, the Sacklers will contribute up to $6.5 - $7 billion, beginning with a $1.5 billion payment on the Plan’s effective date.
• Purdue’s plan meaningfully compensates individual victims, providing a pool of up to $865 million.
• In addition to providing billions of dollars in cash to creditors, the Plan generates substantial further value by creating a new company with a public-minded mission dedicated to solutions for the opioid crisis.

Upon emergence, Purdue will be dissolved, and substantially all of its assets will be transferred to this newly formed company, Knoa Pharma.

• Knoa Pharma will be owned by an independent, newly created foundation.
• It will provide millions of doses of lifesaving opioid use disorder treatments and overdose reversal medicines, with no obligation to maximize profits. To learn more about these public health initiatives, click here.
• Knoa Pharma will be subject to a strict operating injunction with oversight by a monitor to ensure that it provides its medicines in a safe manner that limits the risk of diversion.
• The Sacklers will have no interest in or role with the new company, just as they have had no involvement in Purdue since the end of 2018.

The Plan creates a document repository – larger than the entire tobacco industry repository – that will make available to the public millions of documents, including privileged documents, related to Purdue’s historical sales and marketing practices.

Next Steps

Once confirmation of the Plan is secured, Purdue will prepare for its consummation. The Plan and its settlements will deliver the abatement initiative funding and victim compensation that have been the company’s goal throughout the bankruptcy process.

About Purdue Pharma L.P.

Purdue and its subsidiaries develop, manufacture and market medications to meet the evolving needs of healthcare professionals, patients, and caregivers. Purdue and its subsidiaries focus on balancing innovative science with clinically effective, compassionate care. The Company’s goals are to serve patients who rely on its medicines, pursue public health initiatives intended to help abate the opioid crisis, advance its pipeline of branded and generic medications, and introduce medicines that will help save and improve lives.

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