Opioid maker Endo International has filed for bankruptcy to limit liability in lawsuits related to opioid addiction and pay off billions of dollars in debt.
In connection with the filing, Endo agreed in principle with the Attorneys General to provide state and local governments with up to $450 million, ban the advertising of Endo’s opioids, and require Endo to provide millions of documents related to his Role in the opioid crisis Released in an online public archive.
The generic and specialty-brand pharmaceutical company filed a so-called pre-order for bankruptcy in the US Bankruptcy Court for the Southern District of New York on Tuesday night. With the support of the creditors, a prior bankruptcy is filed.
Under the plan, the maker of Percocet and other drugs will put itself up for sale and sell itself in a $6 billion loan offer that will swap debt for equity in the reorganized company unless it receives a better offer. Endo used to make Opana, an opioid pain reliever that the Food and Drug Administration asked to be phased out in 2017 after concluding that the drug’s benefits may no longer outweigh its risks.
Endo’s India-based companies are not part of the Chapter 11 proceedings. The company awaits recognition procedures in Canada, the UK and Australia.
“By finally addressing the more than $8 billion in debt that has weighed on our balance sheet and creating a path to closing the thousands of opioid-related and other lawsuits the company has been defending at prohibitive costs, we will do so be able to move forward as a new endo and realize our full potential,” CEO Blaise Coleman said in a statement.
Last week, Endo warned that a bankruptcy filing was “imminent” and that the company was in constructive discussions with creditors.
The company had net debt of $8.1 billion as of June 30 and elected not to make certain interest payments when they became due on June 1 while it negotiated with creditors. Endo also had $1.19 billion in unrestricted cash, including $78.4 million held in settlement funds for opioid-related matters.
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On August 1, Endo faced 15 opioid-related lawsuits filed by states; 2,570 submitted by local governments and Native American tribes; 310 from hospitals, healthcare systems, labor unions, health and welfare funds, or other third-party payers; and approximately 220 cases filed by individuals.
A bankruptcy filing would limit the claims.
Other companies have addressed claims related to opioid addiction this year.
Purdue Pharma filed for Chapter 11 bankruptcy in September 2019 and had its settlement approved by a bankruptcy court in March, after which the founding Sackler family agreed to pay $6 billion to fund opioid trusts.
Teva Pharmaceutical Industries in July announced a statewide agreement in principle to pay $4.25 billion to settle claims and $100 million to Native American tribes. The figure includes up to $1.2 billion for supplying its generic version of the life-saving drug Narcan at wholesale prices.
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Drugstore chain Walgreens agreed in May to pay Florida $683 million to resolve all claims related to the company’s pharmacies in the state.
Drug distributors AmerisourceBergen, Cardinal Health and McKesson agreed in February to pay $21 billion as part of a settlement with opioid maker Johnson & Johnson adding another $5 billion.
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