Purdue: U.S. trustee again objects to Sackler release, attorney fees

By Sarah Lizee

Olympia, Wash., Aug. 24 – Purdue Pharma LP’s Chapter 11 plan drew another objection from Region 2 U.S. trustee William K. Harrington, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Though the plan has been amended twice since Harrington’s last objection, the U.S. trustee raised the same concerns in Tuesday’s objection that he did originally.

Harrington said he continues to object to the plan because of two impermissible provisions, including the “extraordinarily broad” nonconsensual third-party release of the Sackler family and other non-debtors by extinguishing non-debtors’ direct claims against them, and the payment of no less than $500 million in attorneys’ fees without court oversight and approval or the opportunity for parties to object.

“With the eighth amended plan, debtors are understandably responding to the multiple infirmities of the third-party releases exposed by the trial testimony and the court’s statements about the problematic scope,” the U.S. trustee said in his objection.

“But the same incurable infirmities remain as described in the objection to the sixth amended plan, while the introduction of new definitions and provisions interjects additional uncertainty about the scope and constitutional infirmities in procedure.”

Purdue Pharma is a Stamford, Conn.-based drug manufacturer. It filed for Chapter 11 bankruptcy on Sept. 15, 2019 under case number 19-23649.

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