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AG Donovan says he's committed to challenging bankruptcy plan for opioid drugmaker

Attorney General TJ Donovan at a podium
Peter Hirschfeld
VPR File
Vermont Attorney General TJ Donovan speaks during a press conference in a file photo from March 15, 2018.

Last week, the state of Vermont and four others filed a legal brief seeking to reverse a bankruptcy plan for Purdue Pharma. The plan would grant the Sackler family — the owners and founders of the company — legal immunity from future lawsuits over Purdue’s role in creating the opioid epidemic. In exchange, the Sackler family would pay $4.3 billion over nine years to help curb the public health crisis. More than a dozen states have agreed to the deal.

But Vermont and the four other states have held out for months now, refusing the settlement plan. Attorney General TJ Donovan says it doesn't hold the Sackler family sufficiently accountable.

VPR's Liam Elder-Connors spoke with Donovan about recent developments in the case. Their interview is below and has been edited and condensed for clarity.

Liam Elder-Connors: As I mentioned in the introduction, Vermont and four other states have refused to settle with Purdue and are looking to reverse the bankruptcy plan. For those of us who aren't lawyers, could you describe exactly what you're hoping to achieve?

Attorney General TJ Donovan: Sure. Well, we've appealed the bankruptcy court's approval of Purdue's bankruptcy plan. And the part that we take issue with, which is the basis of the appeal, is the nonconsensual third-party release of our claims — the state of Vermont claims and other states — against the billionaire family, the Sacklers.

More from VPR: 'Too Little Money Over Too Long Of A Time:' AG Donovan Says He Opposes Purdue Pharma Bankruptcy Plan

Essentially, you have billionaires going into bankruptcy court — who are not declaring bankruptcy, who are not parties to bankruptcy — but are adding value to the underlying deal, meaning money. In exchange, they're getting all the claims against them dismissed. I think that's unfair. I don't think that's how our justice system should work. That's why we've appealed it.

Now, there was something that I think was very positive that happened out of that bankruptcy appeal hearing last week. The reason why we filed a supplemental brief is because the judge asked the parties to, essentially, what we call brief the research question: whether the Sacklers had abused the bankruptcy process by planning to take billions of dollars out of the company post 2007. So this is a real issue, I think, of fairness. It's a real issue of a threshold question about is there two different systems of justice in this country — the one for the very wealthy, and another one for the rest of us?

We need money to invest into our community to address the issue of addiction — that takes money. And it has to be money that is going to last for decades, frankly.
- Vermont Attorney General TJ Donovan

Well, what is the next step if the court agrees? What's your endgame here?

Well, my endgame is to maximize the recovery for the state of Vermont. We've had, I think, the highest rate of overdose deaths this past year during the pandemic. People are struggling. We need resources. We need money to invest into our community to address the issue of addiction — that takes money. And it has to be money that is going to last for decades, frankly,

Does Vermont stand to potentially lose out on a payout from the settlement if your court challenge isn't ultimately successful?

Look, you always have risk anytime that you're involved in litigation. You always have risk when you appeal court decisions. But at the end of the day, you have to do what you think is right.

But I'm just wondering, more specifically, is Vermont at risk of losing out on getting any money if this challenge isn't successful?

I'm confident that there will be a recovery for the state of Vermont at the end of the day.

Okay. How long are you willing to remain in this particular fight? Are you willing to keep pushing forward even if some of the larger states in the coalition, like California, were to pull out of it?

Yeah, I think I am. Look, you know, when you're involved in this you have to be willing to push your chips all into the middle of the table, and say that you're fully committed to this process. To litigating. To objecting to something that you think is wrong. And I am, at the end of it.

I'm not willing to settle for something today. I think, oftentimes, no deal is better than than a bad deal.
- Vermont Attorney General TJ Donovan

But that being said, I also understand that in the final analysis we will get to a final judgment somewhere in the legal process, and I'll accept that final judgment. And I also understand what the bottom line is to Vermont — that we do need those resources. But I'm not willing to settle for something today. I think, oftentimes, no deal is better than than a bad deal. And so it's not enough money to the state of Vermont. I think right now it's maybe, ballpark, $12 million over nine years for the Purdue settlement to the state of Vermont? That's not enough.

Opioid overdose deaths have reached record highs in this country during the pandemic. And Vermont's numbers, as you mentioned, have gone up quite a lot as well. In an attempt to curb overdose deaths, New York City opened up the country's first supervised injection sites. Do you support the creation of similar facilities in Vermont?

Yeah, I'm open-minded to it, and I think things have changed with the Biden administration. You'll recall, under the Trump administration, the U.S. attorney here in Vermont, as was her right, objected to these overdose recovery sites and said that she would prosecute folks. And it's not just people who may administer the drug or take the drug — it's also the landlord who owns the building. It's also the insurance company who's going to underwrite this endeavor.

And so we need clarity from the federal government because we don't want people to be at risk of having their property seized. But we need clarity, which I think we'll get from our federal counterparts, so people can proceed with this. Because look, every one of these death is a tragedy. And we have to make sure that we have options and opportunities throughout our state to prevent these overdose deaths from happening.

That's Vermont Attorney General TJ Donovan. Thanks so much for the time.

Thanks for having me.

Have questions, comments or tips? Send us a message or tweet us @vprnet.

Liam is Vermont Public’s public safety reporter, focusing on law enforcement, courts and the prison system.
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