Verdicts & Settlements

3 BigLaw firms will give back $1M in Purdue Pharma legal fees in settlement with trustee

  • Print


Image from

Three large law firms have agreed to reduce fee applications by $1 million in their bankruptcy representation of Purdue Pharma, the maker of the prescription pain medication OxyContin, after the U.S. trustee alleged a failure to disclose a common interest agreement.

The three law firms are Skadden, Arps, Slate, Meagher & Flom; Wilmer Cutler Pickering Hale and Dorr; and Dechert, report Law360, and Bloomberg Law.

Although the firms maintain that the disclosure was adequate, they agreed to give up $1 million in pending and future fees in a settlement with the U.S. Department of Justice’s U.S. Trustee Program, according to an April 29 press release and the settlement agreement.

The trustee said the law firms should have disclosed a joint defense and common interest agreement with other parties, including members of the Sackler family who were the owners of Purdue Pharma. The trustee cited Bankruptcy Rule 2014, which requires disclosure of any connections with other parties in interest in the bankruptcy.

Purdue Pharma signed the agreement in May 2018 after pending lawsuits against opioid makers were consolidated into multidistrict litigation. After Purdue Pharma filed for bankruptcy in September 2019, the law firms agreed to represent Purdue Pharma but did not disclose the agreement.

The common interest agreement didn’t require the parties to pursue the same strategy, but it did allow the parties to share potentially privileged information without waiving privilege as to third parties, the U.S. trustee said in the settlement agreement.

The trustee had contended that the agreement should have been disclosed because the bankruptcy case was filed to implement a global settlement involving the debtors, the Sacklers and plaintiffs. The common interest agreement had been invoked to withhold documents in discovery.

The trustee did not find that the failure to disclose was intentional or that there was any intent to mislead.

The law firms said there is a common practice of not disclosing common interest agreements under Bankruptcy Rule 2014, but they agreed to resolve the matter in the interest of expediency, the settlement agreement said.

According to Bloomberg Law, Purdue Pharma agreed to pay $8.3 billion to settle federal probes of how it promoted OxyContin. The Sacklers agreed to contribute $4.2 billion to the bankruptcy estate as part of a settlement.

Give us feedback, share a story tip or update, or report an error.