Commercial Purdue Pharma's exeuctives to get $7M bonus authorized by...

Purdue Pharma’s exeuctives to get $7M bonus authorized by federal judge


A U.S. federal judge upon approving bonuses of $7.1 million for five executive members of Purdue Pharma, received denunciation from a mother of an opioid crisis victim. A woman whose son died of the opioid overdose criticized him for handling the very case of the bankrupt makers of OxyContin. 

In a virtual court hearing on 13th September, in White Plains, New York, the U.S. bankruptcy judge, Robert Drain, signed the executive incentive plan.

Drain’s adjudication came two weeks after his approval announcement of Purdue’s reorganization plan that was subjected to $10 billion settlement against numerous opioid-related indictments brought to court and also shielding the Sackler family members, Purdue’s former owners, from future civil litigations.    

The Sackler family contributed $4.5 billion to the settlement plan receiving a huge support from the creditors, but at the same time pouring in objections from the critics regarding billions of dollars that would still be in the possession of the family, which apparently fails to hold them accountable.  

According to the CDC, more than 500,000 people have died of the opioid overdoses since 1999.

Ellen Isaacs, whose son died of the drug’s overdose, urged Drain in the hearing to reconsider his adjudication and extricate himself from the case saying, “OxyContin tore our family to shreds.”

She said that it’s “well known” that the bankruptcy was filed prior to Drain taking charge as the Sacklers knew he had a history of approving releases. She further claimed that the families of the victims were compensated with too little as per Purdue’s plan and that Sacklers, who have denied their wrongdoings, must face criminal charges. 

While declining Isaacs appeal, the federal judge said that he has “no love lost for the Sacklers” and that he cannot be “manipulated by anyone” in the case. He also mentioned that the releases supported by various courts across the country do not cover up the Sacklers from holding them accountable.

Purdue’s executives have to get a total incentive payments ranging between $4 million and $5.4 million this year, depending upon their abilities to achieve targets as they are working for the bankrupt company. Moreover, they could get an additional $1.7 million as long-term incentives, as they need to meet the deadlines for testing and development of non-opioid products, net sales of these products and operational profit for the company.

Drain did not consider these as incentive payments, rather, he said he was approving “bonuses” because of the fact that these payments add up to only half of the total compensation range for the executives, even if paid in full.    

“No doubt my ruling will be construed by some as authorizing large bonuses to executives. I do not believe that is in fact the case here,” he added.

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