Board authorizes city attorney to join Purdue Pharma bankruptcy plan

The Board of Public Works and Safety voted Aug. 4 to authorize the city attorney to participate in the Purdue Pharma bankruptcy plan and to file a claim on behalf of the city. City Attorney Lynn Gray told the board the Sackler family and Purdue Pharma have proposed a $6.5 billion settlement to be placed into trusts and distributed to states, local governments, tribes, health-care providers, public schools and emergency-room claimants over the next 15 years. "Those 6,500,000,000.0 will be paid in 16 installments over the next 15 years," Gray said, and noted the first $1.5 billion would be paid immediately on approval. Gray said multiple iterations of the plan have been reviewed, including a U.S. Supreme Court decision that affected releases in the bankruptcy context, and that participation by local governments increases the amount available to trust members. "Every lawyer that I have seen... said that if people are willing to approve participation in the bankruptcy, it will increase the amount of money that will go to those trust members," Gray said. She also said $135 million of company assets would be placed into a new company (NewCo) dedicated to addiction-related remedies as part of the plan. A board member moved to authorize participation in the plan as presented by the city attorney; the motion passed with the board voting in favor. Board members asked how any funds the city receives would be allocated; Gray said the funds would come to the city first and must be used for opioid remediation, though she could not yet specify how much, if any, would be unrestricted general revenue. Gray noted the settlement is expected to be the largest single payout for many jurisdictions because Purdue was a primary defendant in the litigation. She described the plan as analogous to the national tobacco settlements in size and effect, and said the precise amount the city will receive depends on how many other claimants participate. Speakers cited spoke during the agenda item listed as "authorize participation in the Purdue Pharma bankruptcy plan."