How did Purdue's Chapter 11 case unfold from 2019 to 2022?

analysisPurdue Pharma L.P. and its affiliated debtors filed voluntary Chapter 11 petitions on 15 September 2019 in the United States Bankruptcy Court for the Southern District of New York at White Plains, where the cases of Purdue Pharma L.P. and 23 affiliated debtors are jointly administered as In re Purdue Pharma L.P., No. 19-23649. The debtors' notice and the United States' proof of claim give 15 September for every debtor; the court-appointed claims agent's website gives 15 and 16 September. Judge Robert D. Drain presided until the cases were reassigned to Judge Sean H. Lane as of 1 July 2022. In its proof of claim the United States noted that Purdue had told the court it ran all the debtors as a single entity, and that governmental claims were due by 30 July 2020. The bankruptcy was corporate only: as the District Court and the Second Circuit recorded, no member of the Sackler family and no family entity such as Rosebay or Beacon filed, although they had been named as defendants in opioid suits. A later plan, confirmed on 18 November 2025, took effect on 1 May 2026; the settlement page describes it. ^{1 2 3 4 5 6}

analysisThe company named the lawsuits as its reason. As quoted by the District Court, Purdue represented at filing that it had 'no funded debt and no material past due trade obligations' and no judgment creditors, but that 'the onslaught of lawsuits has proved unmanageable'; the debtors' 2021 Canadian factum counts over 2,600 civil actions in U.S. courts and thirteen in Canada before the filing. That is Purdue's own account. The District Court added that by 2018 at the latest Purdue was in a precarious financial position because of the suits and, relying on testimony that the family had made broad releases a condition of any contribution, concluded that the bankruptcy was 'a critical part of a strategy to secure for the Sacklers a release from any liability for past and even future opioid-related litigation without having to pursue personal bankruptcy'. ^{5 7}

analysisThree days after filing, on 18 September 2019, Purdue asked the Bankruptcy Court to halt all actions not only against the debtors but also against their current and former owners, including trusts and their trustees and beneficiaries, and against their officers, directors, employees and associated entities. The District Court put the scale at over 2,900 actions against Purdue and at least 400 civil suits against the Sacklers (the Second Circuit: almost 3,000 and over 400). The sources date the first order differently: according to the District Court the Bankruptcy Court halted the litigation temporarily on 11 October 2019 and on 6 November 2019 enjoined actions against Purdue and the non-debtor related parties, including members of the Sackler family, while the Second Circuit and the debtors' Canadian factum place the injunction on 11 October. State enforcement suits, which the automatic stay did not reach, were covered. The non-consenting states opposed the motion on 4 October 2019, arguing, as a 2021 student case study summarises, that the proposed settlement contained no acknowledgement of wrongdoing by the family, no public disclosure of evidence and no bar on future misconduct; according to the District Court's 2024 decision, the group, Maryland included, then elected to abide by the order voluntarily. The District Court affirmed the injunction in 2020, and by December 2021 it had been extended 18 times. It stayed litigation; it did not release any claim or decide its merits. Extensions continued after the Supreme Court's June 2024 decision, and on 26 November 2024 the District Court affirmed the 2024 extensions on Maryland's appeal. ^{1 2 3 4 5}

analysisPurdue Pharma L.P. also acted in Canada as foreign representative of itself and the other 23 debtors, and the Ontario Superior Court of Justice (Commercial List) recognised the U.S. cases under the Companies' Creditors Arrangement Act (Court File No. CV-19-627656-00CL). According to the debtors' factum of September 2021, based on an affidavit of Jon Lowne, the recognition proceedings began on 19 September 2019, and on 30 December 2019 the Ontario court extended the recognised stay to the Related Parties, including the Canadian Associated Entities and members of the Sackler family; the Canadian Actions, the New Quebec Class Action and the Sackler Estate Action have been stayed since that date. ³

analysisA separate voluntary injunction governs conduct. At the debtors' request the Bankruptcy Court barred the debtors from promoting opioids and later added limits on lobbying for opioid-enhancing legislation, adherence to the Food and Drug Administration's decision on high-dose opioids, self-monitoring and an independent monitor, as its 2025 bench ruling recounts; the same injunction separately prohibits certain Sackler Parties from actively engaging in the opioid business in the United States. Craig Landau, then Purdue Pharma L.P.'s chief executive, told the House Committee on Oversight and Reform in written testimony of 17 December 2020 that Purdue had agreed to keep refraining from promoting opioids through a sales force, a step he said the company first took under his leadership in February 2018, and from lobbying for laws that might encourage opioid prescribing, under independent monitoring. ^{6 7}

analysisCreditors organised within weeks. On 27 September 2019 the U.S. Trustee appointed nine creditors to the Official Committee of Unsecured Creditors (UCC), which the District Court describes as an independent fiduciary for all unsecured creditors: the Blue Cross and Blue Shield Association; CVS Caremark Part D Services L.L.C. and CaremarkPCS Health, L.L.C.; LTS Lohmann Therapy Systems, Corp.; the Pension Benefit Guaranty Corporation; West Boca Medical Center; and individual creditors, with non-voting ex officio seats for Cameron County, Texas (for the MSGE), the Cheyenne and Arapaho Tribes and Thornton Township High School District 205. Ad hoc groups formed between September and November 2019, according to the District Court: the Ad Hoc Committee of Governmental and Other Contingent Litigation Claimants (AHC) of ten states, six local governments, a federally recognised tribe and the MDL plaintiffs' co-lead counsel; the PI Ad Hoc Group of 60,761 personal-injury claimants; the Multi-State Governmental Entities Group (MSGE) of 1,317 entities in 38 states and territories; and the Ad Hoc Group of Non-Consenting States (NCSG) of 25 states, counting the District of Columbia, that had reached no pre-petition agreement with Purdue or the Sacklers on the outline of a plan. Groups of NAS children, ratepayers and hospitals formed as well. ¹

analysisThe claims process showed how far claims exceeded assets. On 3 February 2020 the court set 30 June 2020 as the bar date for prepetition claims, on Purdue's motion of 3 January, and on 3 June 2020 extended it to 30 July 2020. Over 614,000 claimants filed, among them the federal government, states and local governments, tribes, hospitals, third-party payors, ratepayers, public schools and more than 130,000 personal-injury victims; the District Court noted that just 10% of the claims would imply over $140 trillion of liability, and 628,389 claims had been filed by 21 October 2021. The Second Circuit recorded an estimate of more than $40 trillion for claims against the debtors and the Sacklers, which, as the appellees conceded, far exceeded both the funds available and the Sacklers' personal wealth. ^{1 2}

analysisClaims against the family were investigated by the debtors' board and by the creditors. The Special Committee of the debtors' board of directors, formed in May 2019 and chaired by John S. Dubel, who joined the board in July 2019, held exclusive authority over transactions with the Sackler Parties and over the debtors' claims against their shareholders and the Sackler Parties; its four members were restructuring and pharmaceutical professionals with no prior connection to the family, Purdue Pharma Inc.'s shareholders gave its general counsel an irrevocable proxy over the appointment and removal of the chairman and the committee's directors, and a court-appointed examiner selected by the DOJ found that the committee acted independently during its 22-month investigation, as the Bankruptcy Court's 2025 bench ruling records. Under a stipulation with the debtors and the UCC (ECF No. 291), the Sackler Parties provided diligence materials, certain of them agreed not to deal with their property so as to frustrate any judgment, and they undertook to disclose the value, location and form of their assets. The UCC investigated fraudulent-transfer and fiduciary-duty claims itself and, with the consent of the debtors and the AHC, was granted sole standing to pursue the estates' claims in November 2024. ^{1 2}

analysisThe filing rested on a framework agreed before it. According to the debtors' 2021 factum, after more than a year of negotiations the debtors, their shareholders and key stakeholders agreed in principle that all of Purdue's assets or equity would go to abating the opioid crisis, that the shareholders would sell their pharmaceutical businesses outside the United States and that they would pay a multi-billion-dollar sum to the estates over time; the Bankruptcy Court's 2025 bench ruling calls this the Initial Settlement Framework. Purdue's chief executive Craig Landau told the House Committee on Oversight and Reform in December 2020 that the framework, announced with the filing and supported by 24 state attorneys general, the five U.S. territories and the plaintiffs' executive committee in the federal multidistrict litigation, would provide more than $10 billion of value, an estimate that is the company's own, and required the family to give up all its holdings in Purdue, sell its international businesses and pay at least $3 billion in cash. As the District Court recorded, John S. Dubel testified at the confirmation hearing that the Sacklers made broad third-party releases and releases of the estates' claims a prerequisite of paying the framework amount, 'somewhere around $3 billion or so'. According to the Bankruptcy Court's 2025 bench ruling, mediation then raised the family's contribution from $3 billion to $4.275 billion; it later rose to $4.325 billion and, in 2022, to $5.5 to $6 billion. ^{1 2 3 4 5 6}

analysisCourt-ordered mediation began in 2020. On the debtors' motion of 20 February 2020 the court appointed Layn Phillips, a retired judge, and Kenneth Feinberg as co-mediators on 2 March 2020. The first phase, with formal sessions from 6 March to 11 September 2020, divided value between public and private claimants: the non-federal public claimants committed everything they received to opioid abatement, and each private claimant group's term sheet was made conditional on a plan in which the Sackler families took part. On 30 September 2020 the court opened a second phase on the claims of the estates and others against the family, among the debtors, the UCC, a 'Consenting Ad Hoc Committee', the NCSG, the MSGE and the family's representatives; it ended on 31 January 2021 without an agreement of all sides. ^{1 4}

analysisNegotiations on the family's payment continued outside the formal mediation. After eight further offers and counteroffers ending on 18 February 2021, the Sackler families and their entities, the debtors, the AHC, the Consenting Ad Hoc Committee and the MSGE agreed in principle that the families would contribute a guaranteed $4.275 billion over nine years, or ten if some amounts were paid early, chiefly in exchange for a 'Shareholder Release' in the plan; the obligation is the families' own, separate from the debtors' assets, and the Second Circuit records that the twenty-five non-consenting states, among others, rejected it. On 7 May 2021 the court asked Bankruptcy Judge Shelley C. Chapman to mediate between those states and the families; after 145 telephone meetings and several sessions by 29 June 2021, fifteen states (Colorado, Hawaii, Idaho, Illinois, Iowa, Maine, Massachusetts, Minnesota, Nevada, New Jersey, New York, North Carolina, Pennsylvania, Virginia and Wisconsin) accepted a modified settlement with $50 million more from the families and another $50 million paid earlier, for $4.325 billion in total, a larger public document repository and limits on the family members' naming rights for donations. The debtors' factum adds requirements for the Raymond and Beverly Sackler Foundation and the Raymond and Beverly Sackler Fund for the Arts and Sciences. The Shareholder Release itself did not change; Purdue filed the mediator's report on 7 July 2021. ^{4 5 1}

analysisThe plan was amended twelve times. The debtors filed it on 15 March 2021 (16 March according to the claims agent's website); after a hearing on 26 May the court approved the Disclosure Statement on 3 June 2021 and allowed votes on the Fifth Amended plan. The confirmation hearing began on 9 August 2021 according to the District Court, which describes six days and 41 witnesses, or on 12 August according to the claims agent's website and the debtors' factum, the factum describing three weeks, 41 witnesses, more than 2,800 exhibits and 64 objections, supplemental objections or joinders. On 1 September 2021 Judge Drain ruled that he would confirm the plan if its Section 10.7(b) shareholder release was narrowed to claims in which a debtor's conduct, or the claims against it, are a legal cause or legally relevant factor; the final version followed (the next day according to the District Court in 2021, 9 September 2021 according to its 2024 decision), and on 17 September 2021 he confirmed the Twelfth Amended plan. That order did not stand: the District Court vacated it on 16 December 2021, the Second Circuit reinstated it with the March 2022 modification on 30 May 2023, and the Supreme Court reversed on 27 June 2024; a new plan was confirmed on 18 November 2025 and took effect on 1 May 2026. ^{1 2 3 4 5 6}

analysisUnder the 2021 plan the debtors would hand over substantially all their assets. Most of Purdue's value would go to nine creditor trusts, mainly abatement trusts such as the National Opioid Abatement Trust for governments, while the PI Trust and the PI Futures Trust and an additional $700 to $750 million served personal-injury claimants. Purdue Pharma would cease to exist and its business would pass to a public benefit company, 'NewCo', to be named KNOA, run by five or seven independent managers chosen by the AHC and the MSGE in consultation with the debtors and the UCC, observed by the DOJ, bound by an operating injunction against promoting opioids, governance covenants and a monitor, and with managers required to use reasonable best efforts to sell its assets by 21 December 2024; a public repository of more than 13 million documents was to be created. The family's side was set out in two settlements with the 'Shareholder Released Parties', more than 1,000 family members, trusts, businesses and associated companies, as the District Court described them. In that court's words, the first disposed of the estates' claims for breach of fiduciary duty against the family members 'who were involved in – indeed, who drove – the business decisions' behind Purdue's criminal and civil liability, and for fraudulent conveyance arising from what it described as the family's removal of nearly $11 billion over a decade; the second disposed of certain direct claims, chiefly the states' claims under laws that make responsible officers and directors personally liable. These claims were settled, not adjudicated. In return the released parties would pay $4.325 billion, dedicate two charities worth at least $175 million to abatement, give up naming-rights demands, stay out of business with NewCo, dispose of the non-U.S. Purdue companies within seven years, accept 'snap back' provisions securing payment and agree to the document repository; the Second Circuit counted these concessions toward the plan's fairness. ^{2 3 5}

analysisVotes were solicited with a record date of 10 March 2021 and a deadline of 16 July 2021. According to the debtors' factum more than 120,000 timely ballots were cast and more than 95% favoured the plan, with support within classes of 88.26% to 100% by number and 93.54% to 100% by value; Judge Drain's findings, as recorded by the District Court, put support at over 79% of states and territories and over 96% of other governments and tribes and of personal-injury claimants, and the Second Circuit noted acceptance by over 95% of the personal-injury classes. Eight states and the District of Columbia, certain Canadian municipalities and tribes, the City of Seattle and some 2,683 individual claimants voted against. The Supreme Court's majority later observed that fewer than 20% of eligible creditors took part. ^{3 5 2 6}

analysisPurdue Pharma (Canada) is not a debtor. It is one of the independent associated companies that, according to the debtors' factum, are ultimately owned by the same entities as the debtors but are not their subsidiaries; as defined in the settlement it comprises Bard Pharmaceuticals Inc., the Elvium companies, Purdue Frederick Inc. (Canada), Purdue Pharma (Canada), Purdue Pharma Inc. (Canada) and Purdue Pharma ULC. Its settlements are its own, not the debtors': before the U.S. filing it placed $20 million in trust to settle ten Canadian class actions, subject to approval by courts in Ontario, Quebec, Nova Scotia and Saskatchewan, and the Second Circuit noted a separate $150 million settlement, citing a British Columbia government release of 29 June 2022. Canadian municipalities and indigenous tribes, whose suits concern OxyContin sales in Canada by Purdue Canada and who assert that it was controlled by Sackler family members, were not covered by the class settlement. The 2021 settlement obliged the Sackler Parties, as owners, to try to sell their associated companies within seven years, and Purdue Canada by the later of that date or two years after the British Columbia recovery action of 29 August 2018 ends. After a stipulation with the Canadian governments approved on 9 August 2021, the plan amended on 12 August 2021 excluded from its releases claims against non-debtors, Purdue Canada and the family included, that arise from the conduct of Canadian affiliates rather than of the debtors; the Canadian governments did not object to confirmation, while the municipalities, First Nations and certain co-defendants did. ^{1 2 3}

analysisThe objecting states settled while the Second Circuit appeal was pending. Eight states (California, Connecticut, Delaware, Maryland, Oregon, Rhode Island, Vermont and Washington) and the District of Columbia, which had appealed confirmation, filed a new agreement with the debtors and both family sides, the Mortimer-side Initial Covered Sackler Persons and the Raymond Sackler Family, under which the family sides would add $1.175 to $1.675 billion, for an aggregate contribution of $5.5 to $6.0 billion; the added payments are the family sides' obligation, not the debtors'. The Bankruptcy Court approved the term sheet on 10 March 2022 (ECF No. 4503), noting that confirming the revised plan required orders of the Second Circuit or the District Court, and the nine withdrew their opposition to the plan and its releases. The Second Circuit affirmed the plan with this modification, and the Supreme Court then reversed, as set out above. ^{1 2}

analysisSeveral proceedings ran alongside the main case, according to the claims agent's website: Purdue Pharma L.P. and other debtors against the Commonwealth of Massachusetts and others (19-08289), the proceeding in which the injunction was issued; the debtors' proceeding against AIG Specialty Insurance Company and others (21-07005); a proceeding by Ascent Pharmaceuticals, Inc. (22-07029); proceedings by Alma, Georgia and Bayonne, New Jersey and others against McKinsey & Company, Inc. (22-07044 and 22-07045); and proceedings by individual claimants, including a series with 25- docket numbers. The content of one of them is known only from a 2021 student case study, which reports that on 10 December 2020 two opioid-affected claimants filed a class action against the debtors (20-07027; dated 11 December in the study's citation) seeking a trust to fund counselling and medication-assisted treatment and alleging that the debtors' settlement with the United States was inadequate; the complaint was later amended to add plaintiffs and to name Walmart, Inc. and McKinsey & Co. as defendants for their alleged part in marketing and distributing opioids. These are the plaintiffs' allegations. As of 6 April 2021 the defendants' deadline to answer had been extended by stipulation, with a pre-trial conference set for 16 June 2021, and no answer, ruling or resolution of that proceeding or of a later one by two of the same claimants against Purdue and the United States (21-07088) was found in the retained records. ^{1 2 3}

analysisThe court's case record on GovInfo, in its version of 8 October 2026, lists Purdue Pharma L.P. as debtor; the Official Committee of Unsecured Creditors; David M. Klauder as examiner; Province, FTI Consulting, AlixPartners and Nardello & Co. as financial advisers; and, among the interested parties, Noramco Coventry LLC, The Raymond Sackler Family, Kathe Sackler, Mortimer D.A. Sackler, Frank S. Vellucci, Daniel S. Connolly and Rory Held as successor co-trustees of the Crystal Trust and the Data Trust, The Plan Administration Trust, Coventry Technologies L.P., One Stamford Realty L.P., One Stamford Land Inc. and Nappwood Land Corporation. ⁴