Knoa Pharma: who owns and runs Purdue's successor?

documentedOn 27 June 2024 the Supreme Court of the United States, in Harrington, United States Trustee, Region 2 v. Purdue Pharma L.P., No. 23-124, reversed the Second Circuit's judgment (69 F.4th 45) and remanded. By five votes to four (Justice Gorsuch for the Court, joined by Justices Thomas, Alito, Barrett and Jackson) it held that the bankruptcy code does not authorize a release and injunction that, as part of a Chapter 11 plan of reorganization, effectively seeks to discharge claims against a nondebtor without the consent of affected claimants. The Court called its decision narrow: it did not call into question consensual third-party releases, did not decide what qualifies as a consensual release or pass on a plan providing for full satisfaction of claims against a nondebtor, and, because the plan had been stayed, did not address whether its reading would justify unwinding plans already effective and substantially consummated. Justice Kavanaugh, joined by Chief Justice Roberts and Justices Sotomayor and Kagan, dissented. The petitioner was U.S. Trustee William K. Harrington; the respondents were Purdue Pharma L.P. and others. ^{3 4 5}

outcome

On remand the parties negotiated a new plan; on 18 November 2025 the Bankruptcy Court confirmed the Eighteenth Amended plan, finding its third-party releases consensual and therefore compliant with Harrington, and the plan became effective on 1 May 2026.

documentedIn a release dated May 1, 2026, Knoa Pharma LLC of Stamford, Connecticut announced that it began operations that day, following the conclusion of Purdue Pharma L.P.'s Chapter 11 proceedings on May 1, 2026, when Purdue permanently ceased operations. The company stated that it is 100% owned by the newly established not-for-profit Knoa Foundation, a 501(c)(4), and is overseen by two independent boards whose members have no prior association with Purdue: the Knoa Foundation Board of Trustees (Paul B. Rothman, chair, Rahul Gupta and David Saltzman) and the Knoa Pharma Board of Directors (Norbert Riedel, chair, Karen Griffin, Patricia Lang and Mike McHale). ¹

qualification

Company statement; the Chapter 11 case itself continued after the effective date, with omnibus hearings and enforcement proceedings later in 2026.

documentedThe Disclosure Statement identifies two main funding sources for the creditor trusts: (i) the Shareholder Payment Parties, who agreed to make up to $7.0 billion of cash payments over fifteen years (elsewhere described as paid in cash to the Master Disbursement Trust) and, on a contingent basis, up to $500 million of incremental cash from the sale of their independent associated companies (IACs); and (ii) the Debtors' estates, which the Debtors expected to have approximately $927 million of cash available for distribution on the Effective Date, bringing the total anticipated cash to approximately up to $7.4 billion. Of the Sackler Covered Parties' contribution, $1.5 billion is due on the Effective Date, $500 million on each of the first and second anniversaries, $400 million on the third anniversary and the remaining $3.6 billion in annual installments over the remaining payment years. The Sackler Covered Parties must use commercially reasonable efforts to sell the IACs within seven years, failing which the Master Disbursement Trust may seek a forced sale above an appraised amount. Elsewhere the Disclosure Statement sets the Required Settlement Amount at up to $6.5 billion over fifteen years, allocated $2,762.5 million to the A-Side and $3,737.5 million to the B-Side of the families. ¹

qualification

The $927 million estate figure was a projection that depended on the Effective Date, the cost of the cases and restrictions on cash. The family-side payments are obligations of the Shareholder Payment Parties; the estate cash belongs to the Debtors. The instalments listed for the Sackler Covered Parties add up to $6.5 billion, the Required Settlement Amount; the document does not reconcile its $7.0 billion and $7.4 billion figures with that amount.

documentedExhibit A ("Payment Groups and Payment Parties") to the Master Shareholder Settlement Agreement, in the version filed as Doc 8201 (filing stamp 11/07/25) and marked as a counsel's markup, lists only Sackler-side obligors; none of the Debtors appears in it. Side A is organised in eight payment groups of trusts and individual obligors: Theresa Sackler is the third-tier obligor of A-Side Payment Group 1 (second-tier obligors the Theresa E. Sackler 1988 Trust, Theresa E. Sackler 2008 Trust, Millennium Trust and Perelle Bay Trust) and the fourth-tier obligor of Groups 5 to 7; Kathe Sackler is third-tier obligor of Group 2 (Rosetta Trust); Ilene Sackler Lefcourt of Group 3 (trusts including the Ilene S. Lefcourt Trusts 88 and 96); Mortimer D.A. Sackler of Group 4 (trusts including the Mortimer DA Sackler Trust 1996); and Samantha Hunt of Group 8 (trusts including the Samantha Hunt 1996 Trust), with a drafting note that her counsel was to confirm. The exhibit also lists IAC Payment Parties, including Beacon Trust, Hercules Trust, Mundilab Trust and Medichem Trust on the A side. Under the confirmed plan, amounts paid under the Master Shareholder Settlement Agreement are paid to the Master Disbursement Trust. ^{2 3 4}

qualification

Draft exhibit filed before confirmation; the final Master Shareholder Settlement Agreement was filed later (ECF No. 9132) and its lists may differ. Membership of a payment group is a contractual settlement obligation, not a finding of liability.