Opioid Company Looking To Avoid VA's $20M Settlement

Opioid Company Looking To Avoid VA's $20M Settlement

Introduction

A scheme to avoid paying more than $1 billion as part of a federal settlement for victims of the opioid crisis is being floated by one of the big pharmaceutical corporations that has been charged with flooding America with cheap, addictive pills.

One of the firms accused of disregarding rogue medication sales, sometimes known as pill mills, in order to maximize earnings is Mallinckrodt Pharmaceuticals, which generated more than a third of the opioids in use between 2006 and 2012.

In response to more than 3,000 lawsuits, the business declared bankruptcy in October 2020. It was able to negotiate a deal for $1.7 billion with every state in the union as a result of the action, which would have ended all ongoing claims, put a halt to additional litigation, and had it acknowledge no guilt.

According to rumors from last month, Mallinckrodt is looking for methods to avoid paying up. Of its $1.7 billion in debt, the business has already repaid $450 million. According to the Office of the Attorney General, the Dublin-based corporation owes the Commonwealth of Virginia a total of $21.1 million.

Securities and Exchange Commission filings provide some insight into the company's internal discussions, which seem to have been influenced by investor pressure. Essentially, these are two hedge firms trying to recover money they claim is due to them.

According to the document, the Board is actively assessing the Company's capital requirements in light of its commitments under the opioid settlement and its long-term debt.

If a second bankruptcy case is filed, the court may or may not accept it. But if approved, it would probably see money from the faltering corporation going to debtors first and opioid epidemic sufferers afterwards.

According to NPR, the total amount removed was close to $1 billion. The office is analyzing the Mallinckrodt reorganization plan that was accepted by the bankruptcy court and considering potential alternatives for the states, according to a representative for the AG office.

The corporation has to be held accountable, according to the CEO of the organization McShin, for healing. She claimed that it has been terrible for many years to meet families who have lost a loved one to opioids. A life cannot be valued, but you can make amends for your wrongs, the CEO stated. This money would aid in the community's and families' recovery from the anguish that these pharmaceuticals have brought about.

The Opioid Abatement Authority, a recently established state agency, is in charge of managing a large portion of the opioid settlement funds in Virginia. Localities in Virginia that apply and can prove to the OAA that they will utilize the cash for abatement will receive money from businesses.

Early initiatives have already received funding, including a women's shelter in Southwest Virginia's Washington County. The firm claims it would utilize the $116,000 that it received from the OAA to construct a 54-bed shelter in the heart of Abingdon.