The Leon County Board of County Commissioners approved a bankruptcy plan for Purdue Pharma, L.P. during the July 13, 2021, commission meeting.
In June 2018, Leon County entered into a contract with Levin Papantonio, P.A., and Parks Law, LLC, to represent the county in a multi-district opioid litigation against opioid manufacturers, distributors, and retailers.
In the 1990’s, Purdue Pharma—a Connecticut-based pharmaceutical manufacturer—developed a powerful new opioid painkiller, Oxycontin. According to documents, Purdue engaged in aggressive marketing of the drug, denying its highly addictive properties.
The result of this effort was to greatly expand the market for opioid medications and greatly expand the number of people using opioids. Not
surprisingly, there followed a dramatic increase in the number of people who became addicted to opioids, leading to death, incapacitation, family dysfunction, crime and social problems. These consequences were devastating not only to the individuals involved, but also to all levels of
government, which had to bear increasing costs of health care and social services provided to their citizens who became addicted to opioids and subsequently, in many cases, to heroin, fentanyl and other similar opiates.
As a result of the litigation, Purdue has filed Chapter 11 bankruptcy. As part of the process, all creditors who filed a “proof of claim” against the bankruptcy estate are being asked to vote on the plan. Approximately 600,00 creditors have filed claims, including claims on behalf of nearly 6,000 local governments.
The Purdue Bankruptcy Plan seeks to resolve the case by settlement. Under the plan the assets of Purdue Pharma would be transferred to a new corporation and owned by the public creditors of Purdue. The combined assets of the bankruptcy estate would be allocated to creditors, insurers, hospitals, and individual plaintiffs, the remaining sum, estimated to be nearly $5 billion, will be allocated to state, local, and tribal governments. All funds received from the settlement would be required to be used for abatement of the opioid problem in their communities.
The proposed settlement is currently before the bankruptcy court for final confirmation and the hearing is scheduled for August 9, 2021. It is expected the court will have a decision whether to confirm the plan in September or October.
The State of Florida Office of Attorney General (OAG) has been negotiating an agreement with local governments in Florida that would govern the distribution of all opioid litigation proceeds, if the bankruptcy plan is confirmed.
Leon county does not have a population greater than 400,000 and, therefore, would not receive proceeds directly in the form of a block grant. Instead, the funds would be subject to a “Government Participation Mechanism” to be developed by the state of Florida and its local governments.