New York, May 23, 2010 (AFP) – Bankrupt Purdue Pharma has received approval from a US judge to sell its consumer health business to its Arcadia Consumer Healthcare division for $397 million.
U.S. Bankruptcy Judge Sean Lane approved Purdue’s sale of Avrio Health in a hearing in White Plains, New York, allowing Purdue to begin liquidating assets pending a final ruling on a $10 billion settlement that will use the company’s remaining assets to fight the U.S. The opioid epidemic.
Purdue’s creditors’ committee pushed the company to use the proceeds from the sale to compensate victims of the opioid crisis and fund addiction treatment programs.
Purdue’s attorney, Eli Vonnegut, said at Tuesday’s hearing that the company supports that goal, but first needs to build consensus among various stakeholders in the bankruptcy. Purdue is hesitant to take that step even though its future is uncertain and its bankruptcy plan is tied up in an appeal, Vonnegut said.
Purdue filed for bankruptcy in 2019 to settle thousands of lawsuits alleging it started an epidemic of opioid painkillers that has led to more than 500,000 U.S. overdose deaths over two decades.
Purdue’s efforts to settle the lawsuits in bankruptcy have stalled after the company filed an appeal against efforts to shield its owners, members of the wealthy Sackler family, from liability for their $6 billion contribution to the Purdue settlement.
While Purdue has resolved most of the objections to the plan, the U.S. Department of Justice’s bankruptcy watchdog continues to argue that the Sacklers are not themselves bankrupt and cannot be protected by a bankruptcy remedy.
The 2nd US Circuit Court of Appeals, which heard arguments in April 2022, has yet to rule on the appeal.
Avrio Health has never been involved in Purdue’s opioid business. He sold over-the-counter antiseptics and laxatives, according to court documents.
Purdue had planned to sell the business as part of a post-bankruptcy transition.
Reporting by Dietrich Knauth, Editing by Alexia Garmfalvi and Bill Burkert
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