How much did Purdue pay out to Sackler family entities?

analysisThe debtors commissioned their own count. AlixPartners, engaged by the debtors' counsel in April 2019 and working on behalf of the Special Committee of Purdue Pharma Inc.'s board, compiled a 355-page report of all cash transfers to the Sackler Families and Sackler Entities from 1 January 2008 to 30 September 2019, filed with the Bankruptcy Court on 16 December 2019 as the 1A Report. It counts approximately $10.347 billion of net cash distributions paid by Purdue Pharma L.P. and the Rhodes generic companies to or for the benefit of the family and its entities: $4.120 billion of cash distributions to Purdue Pharma L.P.'s partners, approximately $4.680 billion of tax distributions for the partners' benefit and approximately $1.547 billion earmarked for other Sackler entities. According to the debtors' July 2025 Disclosure Statement the figures were essentially identical to the company's own earlier calculation. ¹

analysisA second AlixPartners report for the Special Committee, the 400-page 1B Report filed on 29 May 2020, catalogued Purdue Pharma L.P.'s non-cash distributions and other dealings with Sackler entities from 1 January 2008 to 15 September 2019, and the valuation firm Bates White assessed whether the partnership received fair value. In its professional judgment Bates White concluded that Purdue Pharma L.P. transferred significant value to the Sackler Families and Sackler Entities, including equity interests in businesses distributed in 2013 and 2014 and the 2017 assignment of the right to future royalties on non-abuse-deterrent formulations of OxyContin, and that some dealings were not at arm's length, in particular the below-market royalties Purdue received from family entities on OxyContin sales. These are a consultant's conclusions presented to the Special Committee and, on a common-interest basis, to the creditors' committee, not court findings, and the Disclosure Statement passage does not give the amounts Bates White estimated. The debtors expected the Sackler Parties to answer that certain asset transfers and off-market dealings reflected rational business planning or long-standing practice, such as distributions for tax purposes. ¹

analysisBefore 2008, by the debtors' own account, most of what Purdue distributed went to taxes. Answering a question from the District Court in 2021, the debtors acknowledged that distributions to the Sacklers from 1 January 1995 to 31 December 2007 totalled $1.322 billion, of which $1.192 billion (90.2%) was used to pay taxes. The court found that in 1996–2007 Purdue passed on average 9% of its revenue a year to the Sacklers, who kept less than 10% of what they received, whereas in 2008–2016 it passed on average 53% and as much as 70%, of which the family retained 56% and used 44% for taxes; distributions rose from about 38% of free cash flow in 2006 to 167.4% in 2007 and stayed in the 90% range for the next decade, and the 2008–2016 distributions contrasted with the practices of Purdue's peer pharmaceutical companies. The court attributed the jump in absolute amounts to the end in 2008 of doubts about the validity of the OxyContin patent, which had capped Purdue's earnings until then. ¹

analysisFor the years after 2007 the District Court's decision of 16 December 2021 put the money the Sacklers upstreamed out of the company in 2008–2017 at some $10.4 billion, of which about $4.6 billion paid pass-through taxes; it stated that over half went into offshore companies owned by the family or into spendthrift trusts and offshore entities, for example in the Bailiwick of Jersey, and that most of Purdue's 2008–2017 earnings came from OxyContin. According to the Sacklers' own expert, the court found, the new pattern drained Purdue's total assets by 75% and its 'solvency cushion' by 82% between 2008 and 2016; it cited Richard Sackler's 2014 email that the shareholders 'took the money out of the business' and a 2014 email in which Jonathan Sackler called the distribution of OxyContin cash flow a 'milking' program. The Supreme Court's 2024 opinion in Harrington v. Purdue Pharma L.P., drawing on the lower courts, describes family distributions of about $11 billion in 2008–2016 that drained 75% of Purdue's total assets, much of it diverted to overseas trusts and family-owned companies. ^{1 2}

analysisWhat was disputed was whether any of the transfers was a fraudulent conveyance, not whether they were made. The District Court recorded that Judge Drain, confirming the 2021 plan, had before him an extensive report and declarations on 'assertedly over $11 billion of avoidable transfers' and acknowledged potential estate claims of that size without finding that any distribution was a fraudulent conveyance or could be recouped. It cited Richard Sackler's answer at the August 2021 confirmation hearing that the Purdue board had transferred billions of dollars to family trusts or holding companies in 2008–2018 ('Yes . . . yes, that we did'), and noted that the Sacklers vehemently deny that any of the transfers would qualify as a fraudulent conveyance. ¹

analysisA press report gave another total. Citing court documents, it said in December 2019 that the family transferred about $10.7 billion out of Purdue Pharma in 2008–2017, against $1.3 billion in 1995–2007. It does not explain its scope, and its total differs from the 1A Report's approximately $10.347 billion for Purdue and Rhodes from January 2008 to September 2019 and from the District Court's $10.4 billion for 2008–2017. Daniel Connolly, a lawyer for one branch of the family, was reported as saying that more than half of the money in the audit was 'paid in taxes and reinvested in businesses that will be sold as part of the proposed settlement.' ³

analysisThe court and the United States name holding entities as the recipients. The District Court found that of the money distributed from 2008 about 44% went to taxes, a small fraction into the independent associated companies owned by the family, and the rest to Rosebay Medical Company L.P. and Beacon Company, the partnerships of the Raymond R. Sackler side (Side B) and the Mortimer D. Sackler side (Side A), which in equal parts own 99.5% of Purdue Pharma L.P.'s parent, Pharmaceutical Research Associates L.P. The United States' proof of claim, filed on information and belief and with approximate dates and amounts, lists the route in more detail: $50 million, $250 million and $199,012,182 to PLP Associates Holdings L.P. in 2008; smaller sums to PLP Associates Holdings Inc. and to Purdue Pharma Inc.; $100 million each to Beacon Company and Rosebay Medical Company L.P. on 6 November 2008; payments to Purdue Holdings L.P., the former name of Pharmaceutical Research Associates L.P., from September 2010 to September 2011, including $261,290,537 on 2 December 2010; and payments to BR Holdings Associates L.P. from December 2011 until a last $200,000 on 14 September 2017. It asserts that the family owns and controls the parent and the holding entities it names. ^{1 2 3}

analysisTwo other accounts describe the 2008–2011 flows. Connecticut's Attorney General alleged in an amended complaint of 6 May 2019 against Purdue Pharma L.P., Purdue Pharma Inc., eight family members and other directors and executives that the Sacklers authorised $275 million each for Rosebay Medical Company L.P. and Beacon Company in early November 2008 and a further $325 million soon after, $160 million and another $100 million in December 2010 through PLP Associates Holdings L.P. and BR Holdings Associates L.P., and $189.7 million, $200 million and $140.8 million in April, June and September 2011. No ruling on these allegations appears in the record, and their amounts and dates do not all match the United States' list, which shows the 2010–2011 payments going to Purdue Holdings L.P. A 2019 press report, citing company records made public in the Massachusetts Attorney General's case, describes a December 2010 board approval of $261.3 million passed through three layers of holding companies and split equally between Beacon and Rosebay, consistent with the $261,290,537 in the United States' list, and quotes Kathe Sackler answering 'I hope so ... I think so' when asked in a deposition whether money distributed in 2008–2011 reached accounts she controlled. ^{4 5 2}

analysisCash distributions to the Sackler Families ended in 2017, according to the debtors. In the same year Purdue Pharma L.P. lent $313 million to its parent, Pharmaceutical Research Associates L.P., which repaid it before the September 2019 petition; a $1.7 million loan to an independent associated company was also repaid, and no loans to those companies remain outstanding. Reimbursement of officer and director legal fees owed to family members stopped on 1 March 2019, and certain family expenses from the preceding ten years were repaid. ⁶

analysisBesides cash, the United States asserts that Purdue transferred assets directly and indirectly to its parent PRA LP, which is not a debtor and is ultimately owned and controlled by entities owned by or for the benefit of the Sacklers. Its proof of claim lists Purdue's own accounting values: equity of Coventry Technologies, L.P. ($52,328,000, estimated date 1 January 2008); Infinity Pharmaceuticals stock ($21,160,000 at 31 December 2008, $11,830,000 on 7 January 2009 and $230,095,802 at 31 December 2013); equity of Millsaw Realty L.P. ($7,412,000, 1 January 2009); Kolltan Pharmaceuticals stock ($12,950,000 on 30 September 2009, and stock and cash of $2,170,802 at 31 December 2014); Novelos Therapeutics stock ($23,140,097, 28 February 2009); equity of Lucien Holdings S.ar.l. (negative $543,000) and New Suffolk Holdings LLP ($32,761,081), both in 2010; rights to non-abuse-deterrent OxyContin (value unknown) on 1 January 2017; and rights to Dilaudid ($16,966,491) and to MS Contin (value unknown) on 1 May 2017, for a stated total of $412,272,152. It asserts that many transfers were not fully documented or valued and, on information and belief, that they were made with intent to hinder creditors or without reasonably equivalent value. These are a creditor's assertions using Purdue's accounting values, not market values, and the listed items do not add up exactly to the stated total; the debtors expected the Sackler Parties to answer that such transfers followed rational business planning or long-standing practice, such as distributions for tax purposes. ^{1 2}

analysisCompany filings show where some holdings went. Novelos Therapeutics' 2010 prospectus states that after financings completed on 11 February, 25 August and 10 November 2009 Purdue transferred its Novelos preferred stock, common stock and warrants to Beacon Company and Rosebay Medical Company L.P., which it calls independent associated companies of Purdue; the United States instead lists Novelos stock valued at $23,140,097 as transferred to PRA LP on 28 February 2009, and the records do not reconcile the two. Celldex Therapeutics' 2017 resale prospectus shows Beacon Company and Rosebay Medical Company L.P. each holding 259,507 Celldex shares issued when Celldex completed its merger with Kolltan Pharmaceuticals on 29 November 2016, a deal in which Kolltan's investors received 18,257,996 shares worth a calculated $62.5 million; voting power lay with the board of Stanhope Gate Corp., Beacon Company's managing general partner, and the board of Rosebay Medical Company, Inc. (Richard S. and Jonathan D. Sackler). The prospectus does not say how the two came to hold Kolltan interests, and the records do not trace them to the Kolltan stock the United States says Purdue moved to its parent in 2009 and 2014. The debtors also state that around 1 January 2008 Purdue distributed its interest in Rhodes Tech's parent to an affiliate, moving Rhodes Tech into another Sackler ownership chain with the same ultimate owners. ^{3 4 1}

analysisThe United States framed the transfers as part of civil claims against four family members and the estate of a fifth. In Addendum A to its 2020 civil settlement with Richard Sackler, David Sackler, Mortimer D.A. Sackler, Kathe Sackler and the Estate of Jonathan Sackler, under the heading 'The Fraudulent Transfer of Assets from Purdue', it contended that Purdue distributed $126 million in cash to family members and their holding companies and trusts in 1997–2007; that from 2008 to 2018 the Purdue board approved billions in cash distributions into family holding companies and trusts; that some of them were made to hinder future creditors or were otherwise avoidable as fraudulent transfers; and that Purdue did not fully document or value some transfers or receive reasonably equivalent value for them. The agreement is neither an admission of liability by the five nor a concession by the United States, and they expressly deny the allegations; the $126 million figure is not reconciled in the record with the debtors' acknowledgement of $1.322 billion for 1995–2007, of which $1.192 billion went to taxes. The five agreed to pay the United States $225,000,000 plus interest, which the debtors record as already paid, and the United States released them and the transferees of funds distributed by Purdue from certain monetary claims, but the agreement does not release claims that the debtors' estates can bring, including fraudulent-transfer claims. ^{1 2 3}

analysisIn its proof of claim of 30 July 2020 the United States, citing Purdue's own cash-transfers report of $10.4 billion of net distributions by Purdue and Rhodes from January 2008 to September 2019, asserts that apart from tax distributions Purdue approved more than $4 billion of cash distributions to family holding companies and trusts: about $751 million in 2008, $880 million in 2009, $846 million in 2010, $559 million in 2011, $406 million in 2012, $278 million in 2013, $118 million in 2014, $129 million in 2015 and $154 million in 2016, or $4.121 billion in all. These are a creditor's approximate figures; the 1A Report's own count of cash distributions to partners from January 2008 to September 2019 is $4.120 billion. ⁴

analysisThe debtors expected the tax share to be disputed. According to their Disclosure Statement, Purdue Pharma L.P. has been treated as a pass-through entity for federal income tax since its formation on 12 June 1991, so its taxable income was reportable by its owners, and under agreements among the Sackler Parties it distributed amounts equal to the tax due at the highest rate of any shareholder; about $4.7 billion of the $10.4 billion in the 1A Report were tax distributions. The Disclosure Statement says the debtors would argue that tax distributions made while Purdue was insolvent could be recovered as transfers for less than reasonably equivalent value, and the Sackler Parties that the distributions let Purdue benefit from its partnership structure without entity-level tax, which at the 35% federal corporate rate of most of the period would otherwise have applied, although comparable companies had lower effective rates. ¹

analysisWhen Judge Drain weighed the estates' claims in 2021, as the District Court summarised, he noted that over 40% of the purportedly avoidable transfers had paid federal and state taxes associated with Purdue that would not be refunded; that the Sacklers had technical defences such as statutes of limitations and the effect of prior settlements; that evidence suggested Purdue may not have been insolvent, unable to pay its debts or left with unreasonably small capital until as late as 2017 or 2018, by which time most or all of the transfers had been made; and that most family members had nothing to do with Purdue's operations and no one had identified anything they did as passive shareholders that would make them liable on alter-ego, veil-piercing or fiduciary-duty claims. He made no findings on the merits of the estates' claims against any family member. ²

analysisOther figures describe the debtors' finances before the bankruptcy. According to the Disclosure Statement, Purdue Pharma L.P. paid about $342 million in settlements from 2008 through 2019, excluding patent and similar intellectual-property disputes, and its enterprise value exceeded the amounts it paid in settlements before the bankruptcy filing. A 2021 student case study, summarising the debtors' statement of financial affairs of 29 October 2019, which is not itself in the record, reports gross revenue of $999,694,017.44 from the start of fiscal 2019 to the petition, non-business revenue printed as '$202, 212,170', and $333,635,947 of payments to creditors of more than $6,425 in the 90 days before the filing, mostly for professional services; the figures are as printed in the study. ^{1 3}

analysisThe debtors judged a suit against the family possible but uncertain. Their 2025 Disclosure Statement says that the federal claims resolved through the DOJ Resolution would, taken at face value, support insolvency before the petition, though the documents do not show how liability accrued over time; that documents could be used to argue that from 2007 family members and directors saw substantial legal risk in opioid sales and discussed diversifying the family's wealth by distributing Purdue's assets; and that cash distributions rose sharply from 2008, soon after the 2007 federal and state settlements. It expected the Sackler Parties to answer that they thought the risks manageable, that distributions tracked rising revenue, profits and cash, that family members at times reinvested instead and that some transfers followed business planning or long-standing practices such as tax distributions; intent would have to be proved transfer by transfer, probably by clear and convincing evidence, and the record shows no ruling on these claims. Under the 2021 plan the Shareholder Released Parties had agreed to contribute $4.325 billion in exchange for releases, but in 2024 the Supreme Court held that the bankruptcy code does not authorise a release and injunction that discharges claims against a non-debtor without the affected claimants' consent. Under the plan the Bankruptcy Court confirmed in November 2025, in a modified bench ruling dated 20 November 2025, the Sackler Parties will pay up to $7 billion over fifteen years to settle both the debtors' claims against them and the direct claims of creditors that elect to settle. ^{1 2 3 4}

analysisEvidence on the transfers was also heard before the 2025 plan was confirmed. In its modified bench ruling of 20 November 2025 the Bankruptcy Court recorded the testimony of the debtors' witnesses at the 12 November hearing, admitted without objection: Mark Rule analysed 37 pre-petition transfers worth some $1.4 billion between the debtors and the Sacklers and concluded that the Sacklers had not provided reasonable value; Richard Collura, who led the AlixPartners team for the Special Committee, described his independent investigation of possible fraudulent-transfer claims against the Sacklers; and John Dubel described the Special Committee's investigation of the debtors' claims against the Sackler Parties. ^{1 4}

analysisBefore 2004 profits also moved between group companies. An Internal Revenue Service special agent's 2007 declaration, attached to The Purdue Frederick Company, Inc.'s plea agreement in support of a forfeiture complaint against that company, states that from 1995 to 30 September 2004 The Purdue Pharma Company, a general partnership owned by and co-located with The Purdue Frederick Company and Purdue Pharma L.P., distributed about $2,854,760,301 of profits, including OxyContin proceeds, by wire transfers between Purdue accounts at JP Morgan Chase to those two owners, OxyContin making up as much as 90% of receipts. This is a government investigator's sworn account, and the transfers it describes were between group companies, not payments to family members. In the plea agreement The Purdue Frederick Company agreed to the filing of the forfeiture complaint and to acknowledge the settlement sum as proceeds of a violation of 18 U.S.C. § 1957 or as forfeitable property, and $276,100,000 was to be forfeited in cash to settle the complaint. ¹