AG Morrisey’s Arguments Help End ‘California Care Out’ in Purdue Pharma Bankruptcy Case
Sept. 2 – MORGANTOWN – Attorney General Patrick Morrisey announced on Wednesday that his case in federal bankruptcy court resulted in a key change in the case, which would allow West Virginia to receive a larger share of the bankruptcy of Purdue Pharma.
Morrisey made his closing arguments at the confirmation hearing of the case last week in U.S. bankruptcy court for the Southern District of New York. He criticized a number of the plan’s flaws, he said, but particularly caught the judge’s attention with the so-called “California Carve Out,” which made California the only state. not to contribute to the 1% intensity fund that would allocate additional funds to the small states hardest hit by the opioid epidemic, including West Virginia.
“It’s great for West Virginia and other small states,” Morrisey said. “There has never been a rational basis for one state, California, to ignore the intensity fund and thus ignore the disproportionate devastation opioid abuse has wrought on small states,” the chief among them West Virginia. “
Purdue Pharma, the maker of OxyContin, filed for bankruptcy in September 2019 to settle the thousands of lawsuits filed against it over its role in the opioid crisis.
In July, he said he would vote against confirming Purdue Pharma’s bankruptcy plan, which will allocate money to the 50 states for opioid treatment and reduction. He then said he opposes the plan because it is based on the population, not the intensity of the problem within the state.
According to the plan, court documents show West Virginia would get 1.16% of the total allowance. Neighbors of Ohio and Pennsylvania would get 4.36% and 4.59%, respectively. California would get 9.92%.
Morrisey said Wednesday: “Many flaws remain in the multi-state’s population-based approach to allocating settlement funds, but the end of the California Carve Out plan in the Purdue plan is indeed an important step in our fight. continues to press all legal levers to ensure West Virginia receives a fair distribution of recoveries as the opioid litigation continues. “
Morrisey said his final argument, delivered on August 25, led the judge to express his immediate concern. The judge cited bankruptcy law which requires the plan to provide the same treatment for every claim or interest of a particular category.
The judge suggested the parties discuss the matter further, Morrisey said, which led to the announcement on Friday that California had turned the tide and agreed to contribute – a decision then officially recognized by the court on Wednesday.
Morrisey sued Purdue Pharma and former CEO Richard Sackler in May 2019. The lawsuit alleges that Purdue Pharma created a false narrative to convince prescribers that opioids are not addictive and that its opioid products were more sure they really were.
The lawsuit argues that Purdue Pharma has proliferated a deceptive marketing strategy in reckless disregard of compliance enforcement. It also alleges that the company’s sales representatives have consistently claimed that OxyContin does not have a dose cap, despite claims by federal regulators that the OxyContin dose cap was evident from side effects.
The Purdue case is one of Morrisey’s ongoing lawsuits against five opioid manufacturers and other national distribution chains.
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