After Bringing in Billions, Bankruptcy may be the Next Step
The maker of OxyContin, Purdue Pharma LP, may be exploring bankruptcy as an option to acknowledge the liabilities that stem from about 2,000 lawsuits against the company. These lawsuits allege that the drug maker supported the opioid crisis in the United States. The litigations accuse the company of misguiding patients and doctors about the long-term risks of using its prescription opioids.
What is OxyContin?
OxyContin, sometimes called Oxycodone or just Oxy, is a prescription medication that is usually used for pain management. Some doctors prefer it because it can treat pain at moderate and severe levels more effectively than other drugs, but comes with the drawbacks of the risk for addiction and dependency, among other side effects. It has been and still is one of the most popular pain management options for people in Nevada and throughout the US.
How Chapter 11 Bankruptcy Could Help Purdue Pharma
If Purdue files for Chapter 11 bankruptcy protection, the lawsuits would cease, allowing for the company to negotiate legal claims under the direction of a United States bankruptcy judge. The company would be able to continue running business almost as usual in a Chapter 11 Bankruptcy. This is different than most businesses’ other option, Chapter 7 Bankruptcy. A Chapter 7 Bankruptcy would require Purdue Pharma to shut down entirely and surrender all its assets to pay debts. Additionally, Chapter 7 has stricter restrictions on which lawsuit judgments can be included since Chapter 7 doesn’t involve any repayment of debts. Chapter 11 is usually only used by large companies with deep pockets and many resources because it is a complicated and drawn-out process. Purdue denies the alleged clams against them, disputing that its opioids came with an FDA-approved warning label concerning the risks associated with the pain medications.
Lawsuits Pile Up as America Faces an Opioid Crisis
The lawsuits accuse Purdue of using misleading practices in order to push drugs that are addictive. They allege that the company intentionally made the drug to form dependencies to prey upon those who suffer from addiction. Some claims deal with fatal overdoses by opioid users. The complaints against the drug manufacturing company include contributing to overdoses resulting in death and flooding the market with opioids that are highly addictive.
The bankruptcy is not certain, and reports indicate that the company has not made any final decisions. Purdue could continue fighting the lawsuits and not file bankruptcy. Purdue Pharma will likely file its bankruptcy in the Southern District of New York.
Liabilities Due to Unintended Medical Effects
In 2017, prescription painkillers and opioids were involved in approximately 47,600 deaths due to overdose. According to U.S. Centers for Disease Control and Prevention data, that is six times an increase from 1999. Purdue Pharma has faced more than 2,600 lawsuits related to the opioid crisis. Those who have been harmed by OxyContin and Purdue Pharma’s other products will likely have a deadline in which to submit their claims due to the bankruptcy. This is known as a proof of claim, and those affected should reach out as soon as they realize they have been injured by the company.
Is Bankruptcy Not Just for Debt?
Bankruptcy doesn’t necessarily mean the drug company is in current debt or financial distress. Purdue has sought out legal advice for restructuring, and it is a possibility that they may also seek out bankruptcy protection before an upcoming trial. With the potential of filing bankruptcy in their back pocket, it gives some unique strategies for Purdue Pharma going into their upcoming trial.
Declaring bankruptcy could offer the legal protection the company needs to address liabilities as they face lawsuits. The Sackler family, which owns Purdue Pharma, may also have personal assets at risk if the lawsuits proceed without the company being shielded by a bankruptcy. The court may need to subpoena their financial records to ensure they aren’t fraudulently avoiding responsibility in the lawsuits.
If you are a business owner struggling with debts, bankruptcy may be able to help. There are options available to you besides Chapter 11 if your company isn’t facing mounting lawsuits. Your best bet is to speak to an experienced Las Vegas bankruptcy attorney. That’s why our office offers free consultations that can even be held over the phone. That way, you can decide if bankruptcy is right for you from the comfort and safety of your own home. Call to schedule your free consultation today. Our Las Vegas bankruptcy office offers free consultations (either in office or by phone). If you are feeling the stress of undo financial burden and would like a debt evaluation and choices in debt relief, contact our office today.