CLEVELAND — Embattled pharmaceuticals company Purdue Pharma is preparing for bankruptcy as some of the multiple states and cities suing the opioid maker reject its offer to settle the mass litigation for $10 billion to $12 billion, Reuters reported, citing people familiar with the matter.
Purdue Pharma lawyers have documents prepared for a Chapter 11 bankruptcy filing as a federal judge awaits settlement updates from plaintiffs, according to the report.
At least 35 attorneys general must agree on a deal, and they have yet to reach a consensus, Reuters reported.
Attorneys general in Massachusetts and New York reportedly oppose the offer to settle more than 2,000 lawsuits alleging that Purdue Pharma created — and stoked — the nation's opioid crisis, allegations the Stamford, Connecticut, company denies.
If Purdue Pharma files for bankruptcy, it will dodge an October trial related to a rash of lawsuits that have been consolidated before an Ohio judge.
Purdue Pharma declined to comment on the Reuters story but told CBS MoneyWatch in a statement it "believes a settlement that benefits the American public now is a far better path than years of wasteful litigation and appeals.
While the company is prepared to defend itself vigorously in the opioid litigation, Purdue has made clear that it prefers a constructive global resolution."
According to Reuters, Purdue claims its global settlement offer — through which privately owned Purdue would file for bankruptcy and reorganize to become what's known as a public benefit corporation — has the "potential to save tens of thousands of lives and deliver billions of dollars to the communities affected by the opioid crisis."
In addition to ceding ownership of the company, Purdue's founding Sackler family would contribute $3 billion of their fortune over seven years, plus another $1.5 billion after they sell Munidpharma, another family-owned business.
A number of state attorneys general argue the family's settlement contribution is too low, according to Reuters.