Purdue Pharma LP is closing in on a deal with about half of U.S. states and territories to settle claims it illegally marketed opioid painkillers, agreeing to provide about $12 billion to help communities confront a public-health crisis tied to the medicines, according to people familiar with the negotiations.

Twenty-three states and three territories told a judge Wednesday they’d support a plan under which the billionaire Sackler family –- which owns Purdue –- would file for bankruptcy, hand itself over to a trust controlled by the states, cities and counties that have sued, and sell its U.K.-based drugmaker Mundipharma, the people said. Purdue’s board must still sign off on the deal. The people spoke on the condition of anonymity because they weren’t authorized to speak publicly about the talks.

Under the current proposal, the Sacklers would guarantee to pay $3 billion as part of the settlement, with most of that generated by the Mundipharma sale, the people said. The family has rejected calls by some state attorneys general to hike their guarantee to $4.5 billion, they added.

“The family supports working toward a global resolution that directs resources to the patients, families and communities across the country who are suffering and need assistance,” according to a statement on behalf of all the Sacklers. “This is the most effective way to address the urgency of the current public health crisis, and to fund real solutions, not endless litigation.”

Josie Martin, a Purdue spokeswoman, didn’t immediately return a call for comment on Wednesday.

U.S. District Judge Daniel Polster in Cleveland, who is overseeing more than 2,000 lawsuits filed by U.S. cities and counties seeking reimbursement for the billions they’ve spent to combat opioid addiction and overdoses, has pushed for support of 35 states for the deal, the people said. Forty-eight states have also sued.

That number would have made it easier for a bankruptcy judge to oversee settlement payouts to states and local governments as part of Purdue’s Chapter 11 plan, the people said. The company is expected to file for bankruptcy between Sept. 15 and the end of the month, the people said.

States that want more from the Sacklers, including Massachusetts, New York and Connecticut, will have to battle in bankruptcy court to extract it from the multibillionaire family, said Chuck Tatelbaum, a Florida-based lawyer who has worked on mass-tort cases that wound up in Chapter 11.

“Without the super majority of 35 states, the case becomes infinitely more complicated,” Tatelbaum said. “A bankruptcy judge will be less inclined to sign off on a deal without that number and then it becomes a question of who gets what and who gives what.”

The current proposal also has the backing of lawyers for some of the cities and counties suing over Purdue’s opioid marketing, the people said. A bankruptcy judge will take that into consideration when deciding whether the pre-negotiated deal will fly in the Chapter 11 case.

First « 1 2 » Next