By Maria Chutchian
(Reuters) -A U.S. judge on Monday ordered mediation in the Purdue Pharma bankruptcy, calling for the company, the Sackler family members that own it and nine states to determine whether they can reach a new opioid litigation settlement by Jan. 14.
U.S. Bankruptcy Judge Robert Drain in White Plains, New York, issued an order directing the parties to negotiate changes to a previous deal rejected by another judge in December that provided the Sacklers protection against future opioid litigation. U.S. Bankruptcy Judge Shelley Chapman is serving as the mediator.
If they do not reach agreement by then, the mediation will end and an appeal by Purdue against the deal's rejection will continue.
Chapman presided over prior mediation that led to the earlier settlement, under which the Sacklers said they would contribute $4.5 billion to Purdue’s reorganization plan, which directs money toward opioid abatement programs. In exchange, the Sacklers, who have denied wrongdoing, received legal protections known as nondebtor releases.
Purdue, the maker of OxyContin, filed for bankruptcy in 2019 in the face of thousands of lawsuits accusing it and the Sacklers of fueling the opioid epidemic through deceptive marketing.
Representatives for the Sacklers and Purdue did not immediately respond to a request for comment, nor did a lawyer representing most of the states that opposed the prior deal.
U.S. District Judge Colleen McMahon on Dec. 16 reversed Drain's approval of Purdue's reorganization plan and the underlying settlement.
Following McMahon's ruling, Drain urged the parties to negotiate in good faith.
Purdue has taken steps to appeal McMahon's decision to the 2nd U.S. Circuit Court of Appeals.
(Reporting by Maria Chutchian; editing by Richard Pullin)