Purdue Pharma to sell consumer business for $397 million
By Dietrich Knauth
NEW YORK (Reuters) - Bankrupt Purdue Pharma received a U.S. judge's permission on Tuesday to sell its consumer health business for $397 million to a subsidiary of Arcadia Consumer Healthcare.
U.S. Bankruptcy Judge Sean Lane approved Purdue's sale of Avrio Health at a hearing in White Plains, New York, allowing Purdue to begin liquidating its assets while it awaits a final ruling on a $10 billion settlement that would devote the company's remaining resources to combating the U.S. opioid epidemic.
Purdue's creditors' committee has pushed the company to use the proceeds from the sale to get started on that effort by compensating victims of the opioid crisis and funding addiction treatment programs.
Purdue attorney Eli Vonnegut said at Tuesday's hearing that the company supports that goal, but will need to build consensus among various stakeholders in its bankruptcy first. Purdue is hesitant to take that step while its future is uncertain and its bankruptcy plan is tied up in appeals, Vonnegut said.
Purdue filed for bankruptcy in 2019 to resolve thousands of lawsuits alleging that its opioid painkiller OxyContin kickstarted an epidemic that has caused more than 500,000 U.S. overdose deaths over two decades.
Purdue's effort to settle the lawsuits in bankruptcy has been stalled by appeals challenging the company's effort to shield its owners, members of the wealthy Sackler family, from liability in exchange for a $6 billion contribution to Purdue's settlement.
While Purdue resolved most of the objections to its plan, the U.S Department of Justice's bankruptcy watchdog has continued to argue that the Sacklers cannot be protected by the bankruptcy settlement because they are not bankrupt themselves.
The 2nd U.S. Circuit Court of Appeals, which heard arguments in April 2022, has yet to rule on the appeal.
Avrio Health has never been involved in Purdue's opioid business. It sells over-the-counter antiseptics and laxatives, according to court documents.
Purdue initially planned to sell the business as part of its post-bankruptcy transition to a nonprofit company devoted to combating opioid overdoses and opioid use disorder.
(Reporting by Dietrich Knauth, Editing by Alexia Garamfalvi and Bill Berkrot)