By Tom Hals and Mike Spector
(Reuters) - OxyContin maker Purdue Pharma LP on Wednesday asked a U.S. bankruptcy judge to halt for roughly nine months more than 2,600 lawsuits alleging the company and its controlling Sackler family helped fuel the U.S. opioid crisis, according to court documents.
In addition to seeking a pause in widespread litigation against it, Purdue also asked U.S. Bankruptcy Judge Robert Drain to shield the wealthy Sacklers from related opioid lawsuits they face.
Purdue filed for Chapter 11 bankruptcy protection on Sunday after reaching an outline of a deal it estimated to be valued at more than $10 billion with states and local governments that brought the bulk of the cases. They allege the company deceptively marketed opioids by overstating benefits and downplaying risks.
Purdue has been accused of contributing to a public health crisis that has been marked by nearly 400,000 overdose deaths between 1999 and 2017, according to the latest U.S. data. Purdue and the Sacklers have denied they are liable for the opioid epidemic.
Purdue said in Wednesday's court filing that an injunction halting litigation would preserve money that would otherwise be drained through prolonged legal battles. Purdue is spending more than $5 million a week in legal and professional fees, and other related expenses, the company said in court papers.
Massachusetts Attorney General Maura Healey, who has sued both the company and family members, said she would oppose Purdue's request.
"This filing isn’t a surprise. It’s yet another effort by Purdue to avoid accountability and shield the Sackler family fortune," Healey said in a statement.
The New York attorney general also said in a statement she would oppose Purdue's request.
A bankruptcy filing usually halts lawsuits immediately. But Purdue is preparing for some states to argue their lawsuits cannot be halted by a Chapter 11 filing because their legal actions were brought to enforce public health and safety laws - exempting them from the usual bankruptcy rules that would stop their complaints.
As a result, Purdue is asking the judge for a separate ruling to stop the litigation with the aim of allowing the company to continue negotiating with plaintiffs to resolve lawsuits.
Purdue has reached a tentative deal to settle lawsuits with 24 states and five U.S. territories, as well as lead lawyers for more than 2,000 cities, counties and other plaintiffs, the company said.
Two dozen states remain opposed or uncommitted to Purdue's proposed settlement and some have said they want more information about the Sacklers' finances and want a larger contribution from the family. Several filed new cases against the Sacklers before Purdue's bankruptcy filing.
In Wednesday's court filing, Purdue said allowing litigation against the Sacklers to continue would threaten billions of dollars they have pledged toward settling lawsuits and increase expenses for the company as it is drawn into the cases.
The family, which would cede control of Purdue to a trust controlled by plaintiffs under terms of the proposed settlement, has proposed paying $3 billion over seven years and an additional $1.5 billion or more through an eventual sale of another company they own called Mundipharma, according to court records and people familiar with the matter.