Purdue Pharma’s Bankruptcy Works Now

Purdue Pharma is a corporation that makes and sells opioid painkillers. It did this in various bad ways that helped create an opioid addiction epidemic, and it has been sued by various victims of that epidemic for trillions of dollars. The value of Purdue — that is, mostly, the present value of its continuing cash flows from selling more opioids — is much less than the value of those claims. So Purdue filed for bankruptcy, and the resolution of the bankruptcy case involves essentially handing over Purdue (to be renamed “Knoa Pharma”) to the representatives of its victims: It will sell opioids and give the profits to the victims of its previous opioid sales efforts, though hopefully the future efforts will be more careful.

But Purdue Pharma was historically mostly owned by the Sackler family, and various Sacklers were deeply involved in its decisions to make and sell opioid painkillers. Purdue also paid roughly $11 billion of dividends to the Sacklers over the years, considerably more than Purdue/Knoa is worth now.