Purdue Pharma has won court approval to exit bankruptcy, concluding six years of intense legal battles over a multibillion-dollar settlement and liability releases involving the opioid manufacturer’s Sackler family owners.
Judge Sean H. Lane announced that he will sign off on Purdue’s Chapter 11 plan during a hearing on Friday in the U.S. Bankruptcy Court for the Southern District of New York. The plan proposes approximately $7.4 billion in payments aimed at addressing nationwide harm caused by the mass marketing and production of addictive painkillers.
A full, detailed ruling from the judge is expected to be issued in court next week.
### Background of the Settlement Plan
The settlement plan was negotiated for more than a year following the U.S. Supreme Court’s June 2024 decision, which overturned a prior iteration that provided the Sackler family with a blanket legal liability shield in exchange for up to $6 billion in settlement contributions.
This landmark Supreme Court ruling barred releases for non-bankrupt third parties without creditor consent in all Chapter 11 cases, fundamentally reshaping how large corporate bankruptcy plans are developed.
### Key Details of the Revised Deal
Under the revised agreement, the Sacklers will contribute approximately $6.5 billion in settlement payments over 15 years, subject to certain reserves. Creditors have been given the option to opt out of releasing claims against the Sackler family in return for a smaller settlement distribution, in compliance with the Supreme Court’s ruling.
The settlement funds will primarily support nationwide opioid abatement efforts. Additionally, roughly $850 million will be allocated to compensate individuals and families affected by addiction-related claims.
### Transfer of Purdue’s Business Assets
As part of the plan, Purdue will transfer its business assets to a public benefit company named Knoa Pharma. Knoa Pharma will focus on developing and distributing medications aimed at reversing opioid overdoses and treating addiction.
### Creditor Support and Objections
The updated settlement plan received overwhelming support, with over 99% of voting creditors backing it. Supporters include entities from all U.S. states and territories, as well as groups representing local governments, hospitals, medical professionals, schools, tribes, and individuals with personal injury claims.
During a three-day trial, the only objections came from a small number of individuals representing themselves, many of whom expressed concerns regarding the extent of relief afforded to the Sacklers.
Judge Lane emphasized repeatedly that the revised plan does not compel anyone to settle claims against Purdue’s owners and noted that bankruptcy proceedings do not grant immunity from criminal liability.
### Statements from Legal Representatives
In closing arguments, Purdue attorney Marshall Huebner of Davis Polk & Wardwell LLP acknowledged that while the plan cannot fully address the pain endured by those affected by opioid addiction and overdoses, it represents the best possible outcome to bring closure to the prolonged proceedings and allow funds to be distributed.
“No party is buying immunity in these proceedings and no party is buying their own form of justice,” Huebner stated.
### Context of Purdue’s Bankruptcy
Purdue Pharma filed for bankruptcy in 2019, facing more than 2,600 lawsuits related to opioid addiction linked to its production and sale of OxyContin, a drug widely blamed for fueling a decades-long opioid crisis in the United States.
Over the course of bankruptcy proceedings, the company faced creditor claims totaling more than $40 trillion. In 2020, Purdue pleaded guilty to federal conspiracy and fraud charges tied to its business practices.
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**Case Information:** Purdue Pharma LP, Bankr. S. D. N. Y., No. 19-23649
**Upcoming Hearing:** November 14, 2025
https://www.bostonherald.com/2025/11/15/purdue-pharma-gets-court-nod-for-bankruptcy-exit-sackler-deal/