States Join Bid For Virus Delay In Purdue Pharma Bankruptcy

By Mike LaSusa
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Law360 (May 20, 2020, 10:20 PM EDT) -- Two dozen states and the District of Columbia have joined calls for a New York federal court to push back the cutoff date for filing claims in the bankruptcy of Purdue Pharma LP, citing the obstacles created by the ongoing COVID-19 pandemic.

The states urged the court in their Tuesday filing to move the claims deadline from June 30 to Sept. 30, pointing to numerous other official deadlines that have been extended due to the global virus outbreak.

"Preparing appropriate proofs of claim in this case requires the attention of public servants who should be focused on the pandemic— including particularly officials responsible for public health," the states argued.

The filing by the so-called non-consenting states — which oppose a proposed settlement that would end 2,000 opioid suits against Purdue brought by local governments, states and tribes — followed several requests from other interested parties who had asked to delay the claims cutoff.

Attorney General Maura Healey of Massachusetts, one of the non-consenting states, said in a statement Tuesday that the filing is meant to support those other requests, some of which were lodged by Bay State-based organizations.

"No one should lose their rights during a pandemic," Healy said.

Purdue told Law360 on Wednesday that it plans to file a motion seeking a 30-day extension of the bar date.

"Purdue has been and remains committed to notifying potential claimants of their right to file claims and the steps they must take to do so," the company said. "This balances our compassion for anyone who may have been impacted by the recent COVID-19 shutdowns against the harms that would be caused to the American public by delaying Purdue's emergence from bankruptcy."

Shortly before filing for Chapter 11 protection in September, Purdue reached a tentative settlement with states under which about 2,000 suits would be dropped; Purdue's owners, the Sackler family, would give up their stake in the company and turn at least $3 billion over to the estate; and the company would become a public beneficiary trust owned by the plaintiffs with its profits going toward addressing the opioid crisis.

Earlier this month, Attorney General Letitia James of New York — a non-consenting state — won a request for subpoenas into the finances of the Sackler family. James had asked for the order in April, joined by the other non-consenting states, saying the Sacklers have slow-rolled and resisted discovery requests into their financial information.

At the beginning of May, U.S. Bankruptcy Judge Robert Drain, who's overseeing the case, told Purdue creditors that they can directly collect bank account information connected with the Sackler family.

Purdue is represented by Marshall S. Huebner, Benjamin S. Kaminetzky, Timothy Graulich, Christopher Robertson and Eli J. Vonnegut of Davis Polk & Wardwell LLP.

The nonconsenting states are represented by Andrew M. Troop, Andrew V. Alfano and Jason S. Sharp of Pillsbury Winthrop Shaw Pittman LLP.

The case is In re: Purdue Pharma LP, case number 7:19-bk-23649, in the U.S. Bankruptcy Court for the Southern District of New York.

--Additional reporting by Emily Field. Editing by Emily Kokoll.

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