© Reuters. FILE PHOTO: Bottles of prescription OxyContin pills, made by Purdue Pharma LP, sit on a counter at a local pharmacy in Provo, Utah, US April 25, 2017. REUTERS/George Frey
By Dietrich Knauth
NEW YORK (Reuters) – Bankrupt Purdue Pharma received permission from a U.S. judge on Tuesday to sell its consumer health business for $397 million to a subsidiary of consumer healthcare company Arcadia.
U.S. bankruptcy judge Sean Lane approved Purdue’s sale to Avrio Health at a hearing in White Plains, New York, allowing Purdue to begin liquidating its assets while it awaits a final ruling on a $10 billion settlement that would devote the company’s remaining resources to the U.S. fight. The opioid epidemic.
Purdue’s creditors’ committee pushed the company to use the proceeds from the sale to begin the effort by compensating victims of the opioid crisis and funding addiction treatment programs.
The company supports that goal, but it will need to build consensus among the various stakeholders in its bankruptcy first, Purdue’s attorney, Eli Vonnegut, said at a hearing Tuesday. Vonnegut said Perdue is reluctant to take this step while its future is uncertain and the bankruptcy plan tied up in appeals.
Purdue filed for bankruptcy in 2019 to resolve thousands of lawsuits alleging that the opioid painkiller OxyContin caused an epidemic of more than 500,000 overdose deaths in the United States over two decades.
Purdue’s efforts to settle bankruptcy lawsuits have been bogged down by appeals that challenge the company’s efforts to protect its owners, members of the wealthy Sackler family, from liability in return for a $6 billion contribution to the Purdue settlement.
While Purdue resolved most objections to its plan, the US Department of Justice’s bankruptcy watchdog continued to argue that the Sacklers could not be protected by a bankruptcy settlement because they were not bankrupt themselves.
The second US Court of Appeals, which heard arguments in April 2022, has not ruled on the appeal.
Avrio Health has never been involved in Purdue’s opioid business. It sells over-the-counter antiseptics and laxatives, according to court documents.
Purdue initially planned to sell the company as part of its post-bankruptcy transition to a nonprofit corporation dedicated to combating opioid overdoses and opioid use disorder.