Purdue Pharma: Examiner appointed to investigate shareholder settlement

By Sarah Lizee

Olympia, Wash., June 24 – Purdue Pharma, LP had Stephen D. Lerner appointed as examiner by Region 2 U.S. trustee William K. Harrington, according to court documents filed Thursday with the U.S. Bankruptcy Court for the Southern District of New York.

Lerner will investigate whether the special committee of the debtors’ board of directors acted independently and not under the direction or influence of the Sackler families with respect to the shareholder settlement reflected in the debtors’ fifth amended joint Chapter 11 plan of reorganization.

As previously reported, Purdue had objected to motion for appointment of an examiner, which was filed by one of the company’s creditors.

“With no factual support, no admissible evidence, and only unsupported innuendo accusing multiple parties including estate fiduciaries and this court of impropriety, the movant claims that the historic shareholder settlement embodied in the debtors’ plan of reorganization was somehow the result of undue influence of members of the Sackler families,” Purdue had said.

Purdue said the shareholder settlement reflected in the plan was “brutally hard fought” by the informal committee of governmental and other contingent litigation claimants, multi-state governmental entities and the official committee of unsecured creditors.

“These parties formed entirely independent views of the settlement,” the company said.

Purdue said the examination proposed by the creditor would not only “squander significant time and substantial resources” but would also “usurp the role” of the bankruptcy court at confirmation, where one factor the court must consider is assessing the shareholder settlement.

Purdue Pharma is a Stamford, Conn.-based drug manufacturer. It filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York on Sept. 15, 2019 under case number 19-23649.

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