OxyContin maker seeks approval for latest settlement plan

OxyContin maker Purdue Pharma will ask a federal judge Wednesday to approve a nationwide settlement that will transform the company into a public trust and contribute up to $6 billion from members of the Sackler family, with most of the money going toward efforts to ease the nation's overdose and addiction crisis.

Another part of the settlement allows people recovering from addiction and those who have lost loved ones to the crisis to directly address some of the Sacklers. That court session, scheduled for Thursday, is sure to be emotional, even in a virtual setting.

The more conventional court proceeding on the plan itself is set for Wednesday in U.S. Bankruptcy Court in White Plains, N.Y. But in a topsy-turvy legal saga, even the routine matter has a twist. States that were among the first to support earlier versions of the Purdue settlement are objecting to one key provision. Joined by some local governments, unions and individuals, they contend it's unfair that the states that held out and then negotiated a larger payment from the Sacklers will receive an outsize share of the additional money.

The matter is before Bankruptcy Court Judge Robert Drain, who approved the earlier settlement last year. That deal was later rejected by an appellate court judge largely because of the opposition of the attorneys general for eight states and the District of Columbia.

After the initial deal was thrown out, the Stamford, Connecticut-based drugmaker went through two months of mediation to reach a new one, announced last week. Even if Drain approves the settlement terms Wednesday, several legal hurdles remain before the company's entire bankruptcy reorganization plan is final.

Like the original settlement, the new one requires members of the Sackler family who own Purdue to give up their ownership. It would be turned into a...