US judge awards $ 7million bonus plan to Purdue Pharma executives, faces direct criticism

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(Reuters) – A U.S. judge on Monday approved up to $ 7.1 million in bonuses for five executives at Purdue Pharma, the bankrupt maker of OxyContin, in a hearing in which he was heavily criticized for her handling of the case by a woman whose son died of an opioid overdose.

A pharmacist holds a vial of OxyContin manufactured by Purdue Pharma at a pharmacy in Provo, Utah, United States, May 9, 2019. REUTERS / George Frey

US bankruptcy judge Robert Drain in White Plains, New York, approved the executive incentive plan following the virtual hearing.

His move comes about two weeks after he announced he would approve Purdue’s reorganization plan, which is based on a $ 10 billion opioid lawsuit settlement and provides for legal releases protecting members of the Sackler family. who owned the business in future civil litigation related to opioids.

The Sacklers contributed an estimated $ 4.5 billion to the plan, which enjoyed broad support from creditors who voted, but critics were angered that the family was withholding billions of dollars and never being the subject of ‘a public civil trial.

“OxyContin has torn our family to shreds,” Ellen Isaacs, whose son died of an opioid overdose, told Drain during Monday’s hearing, urging her to approve her motion to reconsider her decision and recuse himself from the case.

More than 500,000 Americans have died since 1999 from opioid overdoses, according to the Centers for Disease Control and Prevention.

During a 30-minute statement to the court, Isaacs issued a rare rebuke to the judge, saying it was “well known” that the bankruptcy had been filed in Drain because the Sacklers knew he had the used to approve releases like the one they requested.

She also said the Sacklers, who have denied doing wrongdoing, should face criminal charges and that victims and their families are receiving too little under the Purdue plan.

Drain rejected his request and said that although he had “no love lost for the Sacklers” he did not feel “manipulated by anyone” in this matter. He also noted that the releases, which he says are backed by many courts across the country, do not protect the Sacklers from possible criminal liability.

A representative for the Mortimer Sackler family referred a request for comment to an earlier statement disputing allegations made about the family and saying she was “very sorry for the pain and loss people have suffered and acknowledges the anger or the hurt that many people have felt. “

The total incentive payouts for Purdue executives for 2021 are $ 4 million to $ 5.4 million, depending on their ability to meet their goals as they continue to work out of bankruptcy. They could also receive up to an additional $ 1.7 million in long-term incentives. Executives are expected to meet targets related to operating profits, net sales, and timelines for testing and developing non-opioid products.

Drain said he ignored bonuses he approved because even if they were paid in full, they would still only be in the middle of the total compensation range for executives at large pharmaceutical companies.

“There is no doubt that my decision will be interpreted by some as authorizing significant bonuses for executives. I don’t think that’s the case here, ”he said.


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