Endo creditors seek to resolve U.S. government claims for $465 mln

Endo International

22/11/2023 18:22

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      Lenders seek to buy Endo in exchange for forgiving $6 bln
debt
    

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      Lenders had agreed to fund $600 mln in opioid settlements
    

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      DOJ asserted over $7 billion in tax, opioid claims
    

  
    By Dietrich Knauth
       NEW YORK, Nov 22 (Reuters) - A group of Endo
International lenders have proposed paying up to $465 million to
settle U.S. government claims that have held up the drug
company's bankruptcy restructuring, according to court documents
filed this week. 
    The lender group, which includes investment firms Oaktree
Capital Management, Silver Point Capital, and Bain Capital, has
offered to buy Endo in exchange for wiping out $6 billion in
company debt, but objections from the U.S. Department of Justice
have blocked the sale from moving forward. 
    The lenders said they have not yet reached final agreement
with the Justice Department, and they are seeking financial
contributions from other Endo stakeholders for the proposed
settlement, according to a Monday court filing in federal
bankruptcy court in New York. 
    The lender group had previously agreed to fund nearly $600
million in settlements that Endo had reached with states and
people afflicted by the U.S. opioid crisis resolving claims it
helped fuel the epidemic with its painkillers.
    The proposed Justice Department settlement would resolve
over $7 billion in claims for purported tax debts, a criminal
investigation into Endo's opioid marketing, and the federal
government's possible overpayment for Endo medications.
        The proposed Justice Department settlement calls for
paying the $365 million over 10 years, plus an additional $100
million contingent payment if Endo outperforms financial
expectations from 2024 to 2028.
  
         Either Endo or the department could instead opt for a
one-time $200 million payment at the conclusion of Endo's
bankruptcy, according to the court filing.
  
    A Justice Department spokesperson did not immediately
respond to a request for comment. 
    Endo filed for bankruptcy in August 2022, seeking to address
its $8 billion debt load and to settle thousands of lawsuits
over allegations of its role in the opioid epidemic.  
    As part of its bankruptcy, Endo has committed to pay $465
million to U.S. states, $119.7 million to people affected by
opioid addiction, and $11.5 million to a trust for future opioid
claimants.
    Before filing for bankruptcy, Endo paid $242 million to
settle opioid lawsuits, reaching deals with the eight U.S.
states. But it still faced over 3,100 other opioid lawsuits, and
had spent approximately $344 million on opioid defense costs,
according to court filings.  
    More than 600,000 people in the U.S. have died from opioid
overdoses over the last two decades. Litigation against
drugmakers, distributors and pharmacies has resulted in more
than $50 billion in total opioid settlements nationwide.
    The case is In re Endo International, U.S. Bankruptcy Court
for the Southern District of New York, No. 22-22549
    For Endo International: Abigail Davis, Lisa Laukitis and
Paul Leake of Skadden, Arps, Slate, Meagher & Flom LLP; among
others.
    For the ad hoc group of senior lenders: Michael Cohen and
Scott Greenberg of Gibson Dunn & Crutcher, among others.
    For DOJ: Jean-David Barnea, Tara Schwartz and Peter Aronoff
of the U.S. Department of Justice, among others. 
    
    Read more:
    Bankrupt Endo says US government objections imperil $600
million in opioid settlements
    Endo files for bankruptcy as U.S. opioid litigation drags
    Bankrupt Rite Aid sues US Justice Dept to stop opioid
lawsuit