Federal Court Approves Plan for OxyContin Maker to Settle Opioid Legal Claims

A federal court on Tuesday approved a plan for Purdue Pharma, maker of OxyContin, to settle thousands of legal claims related to the opioid crisis.

The 2nd U.S. Circuit Court of Appeals in New York approved a plan that would allow members of the Sackler family to give up ownership of Purdue, which would become a new company called Knoa. The new company’s profits would be used to fight the opioid crisis, the Associated Press reports. The family would also contribute $5.5 billion to $6 billion in cash over time, with at least $750 million going to individual victims of the opioid crisis and their survivors.

Under the court’s decision, the Sackler family is protected from lawsuits related to the opioid crisis.

According to NPR, the ruling is controversial for several reasons, including because it extends the power of federal bankruptcy court to shelter members of the Sackler family who never declared bankruptcy. However, the ruling only applies to the Second Circuit region of the U.S. in New York, Connecticut and Vermont.