MADISON TOWNSHIP ─ A reorganization plan from Purdue Pharma was approved by Madison Township trustees on Monday afternoon, paving the way for the township to potentially receive future opioid settlement funds.
According to an FAQ regarding the reorganization plan from Purdue, before filing for a Chapter 11 bankruptcy in 2019, the company faced more than 2,900 lawsuits in the U.S. for developing and marketing OxyContin.
The medication has allegedly exacerbated the opioid crisis.
In March, Purdue filed the plan worth more than $10 billion at a U.S. Bankruptcy Court in New York, according to multiple national news outlets. A federal bankruptcy judge has permitted the OxyContin maker to get the required votes for the reorganization plan from 600,000 creditors.
According to Purdue’s FAQ, Madison Township and other 6,000 local governments, have filed claims against Purdue last July and are eligible to vote on the proposed bankruptcy plan.
Leanna Rhodes, fiscal officer for Madison Township, said the Richland County Prosecutor’s Office recommended the township to take Monday’s action.
After the vote on Monday, Trustee Catherine Swank said the amount of money the township will receive remains unknown at the moment.
The township did not plan to file a claim against Purdue last year after then Fire Chief Ron Luttrell said the department had no major issue getting Narcan, the medication used to treat overdose, according to Rhodes.
However, the township changed its mind after the county prosecutor’s office provided an estimated claim from economists. According to the economists’ opinion, Madison Township’s estimated damage and abatement cost from 2003 through 2040 resulting from the opioid crisis will be more than $540,000.
The estimates were based on various categories such as drug treatment programs expense and tax revenue loss, according to the estimate.
Andrew Keller, chief civil assistant prosecutor for Richland County, said in an email on Tuesday that Madison Township was eligible to file a proof of claim in Purdue’s bankruptcy because trustees are members of the nationwide class action opioid litigation against several opioid drug manufacturers.
Keller said the township did not make a specific monetary claim when participating as a member of the class.
Richland County commissioners recently also voted to support Purdue’s reorganization plan, according to Keller.
Purdue has divided the claims against the company into 18 classes, according to the FAQ. Two-thirds of the members in each class must vote for the plan to get it approved. The bankruptcy court has scheduled a confirmation hearing on August 9, which Purdue will officially announce the voting results.
While the money local governments will receive is unclear now, Purdue estimated that Ohio will get more than 4.3 percent of the settlement funds, ranked sixth among the country. California will likely get the most funds at almost 10 percent. Florida is expected to receive 7 percent of the money.
According to Purdue’s FAQ, the money will flow through the National Opioid Abatement Trust, which was established to allocate the funds, and support approved abatement uses.
