Johnston Town Council votes to approve Purdue Pharma bankruptcy class action settlement


Four members of the Johnston Town Council held an executive session Monday night to discuss opioid litigation.

According to Town Council Vice President Joseph Polisena Jr. and Assistant Town Solicitor Dylan Conley, Town Council voted to approve acceptance of a settlement related to the proposed Purdue Pharma Bankruptcy Plan.

“This is the Purdue Pharma bankruptcy, related to a national class action lawsuit,” Conley said Tuesday night.

Attorney Dylan Conley did not attend the meeting. However, his father, Town Solicitor William J. Conley Jr., attended the meeting and briefed councilors in a closed-door session.

When Town Council returned to their regular session, they made no mention of the vote.

According to Johnston Town Clerk Vincent P. Baccari Jr., Town Council voted 4-0 to agree to accept a settlement.

Town Council President Robert Russo did not attend the meeting.

Both Polisena and Dylan Conley said they could not disclose settlement details because the litigation is still ongoing.

The settlement relates to partial resolution of ongoing National Opioid Litigation, according to that night’s Town Council agenda.

Council members also received a general update on “opioid litigation status,” according to the agenda.

“We voted to accept the opioid settlement,” Joseph Polisena Jr. said Tuesday. “I can’t get into the specifics of the situation because it was in executive session. Litigation is still ongoing and it’s still in the court. The town is involved in a class action lawsuit.”

Dylan Conley compared the litigation “as a national phenomena” similar to the class action lawsuits brought against Volkswagen approximately five years ago and “the lead lawsuits and the cigarette lawsuits” of decades past.

“They’re similar in how governments received funds,” Conley said. “Just at a scale more equivalent to cigarettes and lead.”

It could be a while before the settlement funds hit the town coffers.

“We will receive a series of different settlements from a series of different lawsuits, because the lawsuits are against a series of different corporations that participated in the distribution in the opioid market,” Conley explained.

Claimants and creditors were required to vote on Purdue Pharma’s proposed bankruptcy plan of reorganization by July 14.

Conley said his firm is representing several Rhode Island municipalities in this case, including Johnston and Westerly.

“After the voting period, the Bankruptcy Court will hold a Confirmation Hearing for the Bankruptcy Court to consider whether to approve the plan,” according to a website set up for claimants to respond to the case.

The Confirmation Hearing is scheduled for Aug. 9.

“If the plan is confirmed, anyone with an actual or potential claim against Purdue Pharma L.P. or any of its affiliated debtors, or with an actual or potential claim against Sackler family members, and certain other individuals and related entities, relating to Purdue Pharma L.P. and its affiliated debtors (including Purdue prescription opioids, like OxyContin®, or other prescription opioids manufactured, marketed, or sold by Purdue), will be bound by the terms of the plan, including the releases and injunctions contained therein,” according to the website. “In return for providing the releases, claimants who timely filed a claim will be eligible to participate in the trust distribution process. By following the trust distribution procedures, claimants may be eligible to receive recoveries from the applicable trust established pursuant to the plan. For example, holders of personal injury claims, including holders of NAS personal injury claims, are eligible to receive recoveries from the Personal Injury (“PI”) Trust.”

The courts will eventually dissolve the Purdue corporation.

“After emergence from Chapter 11, its operating assets will be transferred to a newly formed company with a public-minded mission of addressing the opioid crisis,” according to the website,

“The new company will be held to the highest standards of conduct, including a prohibition restricting the promotion of opioid products to healthcare professionals,” according to the website. “The new company will ultimately be owned by a new National Opioid Abatement Trust established for the benefit of the American people. State and local governments will neither own, nor operate the new company.”

The former owners of Purdue Pharma, the Sackler families, “currently have no role in Purdue Pharma, and will have no involvement in the new company,” according to the website.

“The Sackler families will sell nearly all of their interests in their foreign pharmaceutical businesses, and members of the Sackler families will be prohibited from future active participation in the business of making and selling opioids. Under the proposed plan, the Sackler families have agreed to pay $4.275 billion over nine years, in addition to the $225 million previously paid to the United States to resolve civil claims, for a total settlement of $4.5 billion.”

The proposed plan limits liability of the company’s founders and former owners.

On Tuesday, Johnston Mayor Joseph M. Polisena said he had not been briefed on Monday’s executive session.

“If we do get any settlement money, we’re going to use it for education,” he said. “Council and I have spoken on this before.”

Mayor Polisena described the litigation as “kind of a win-win situation” for the town.

“We went into this with our eyes wide open,” he said. “Unfortunately for the people who have been subject to opioid abuse, this is not a win-win for them.”

The mayor said settlement money will likely help fund “longstanding programs for opiate abuse” and “education on drug use.”


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