By Dietrich Knauth

NEW YORK (Reuters) – Purdue Pharma on Tuesday received approval from a U.S. court for a 60-day stay of lawsuits against its owners, members of the wealthy Sackler family, in its first court appearance since a Supreme Court ruling that overturned the settlement of bankruptcy.

U.S. Bankruptcy Judge Sean Lane made the order at a hearing in White Plains, New York, saying a ceasefire would give Purdue a chance to renegotiate a comprehensive settlement of lawsuits alleging the painkiller OxyContin caused an addiction crisis in opioids in the US.

The U.S. Supreme Court ruled June 27 that Purdue Pharma’s bankruptcy settlement cannot shield the Sacklers, who did not file for bankruptcy themselves, for their role in the nation’s deadly opioid epidemic.

The decision sent Purdue back into the fold after nearly five years of bankruptcy and jeopardizes billions of dollars in funding that the company and the Sacklers had promised to pay to deal with crisis damage.

Lawsuits against members of the Purdue and Sackler family by state and local governments, as well as individual plaintiffs, have accused them of fueling the opioid crisis through misleading marketing of its pain medications. The company pleaded guilty to misbranding and fraud charges related to the marketing of OxyContin in 2007 and 2020.

Purdue’s bankruptcy has halted opioid lawsuits against the Stamford, Connecticut-based drugmaker since 2019, and Purdue has extended that legal protection to the Sacklers.

Purdue attorney Marshall Huebner said the company will engage in “a high-speed, high-stakes mediation” with the Sacklers, state and local governments and other stakeholders. Protecting the Sacklers during a “modest” 60-day negotiation period will give Purdue a real chance to negotiate a new bankruptcy settlement and put money toward stopping opioid overdoses and treating addiction, Huebner said.

“Every day of delay continues to have a tragic, tragic cost,” Huebner said.

Several stakeholders expressed hope for a settlement, but said mediation should not be extended beyond the 60-day timeline proposed by Purdue.

“It is important to all parties in this case that we conclude this five-year Chapter 11 case,” said Kenneth Eckstein, an attorney representing a coalition of state and local governments.

During the hearing, Lane also appointed two mediators to help with the settlement talks, including retired bankruptcy judge Shelley Chapman, who mediated an earlier deal in which the Sacklers agreed to pay up to $6 billion to settle the opioid lawsuits. Eric Green will be the other mediator.

If mediation fails, Purdue said a court-appointed committee representing its creditors should be able to sue the Sacklers over claims they siphoned more than $11 billion from the company and that their conduct made Purdue liable for other actions.

The Sacklers said the creditors’ proposed appeal is counterproductive and based on “factual errors”. Family members have denied wrongdoing and would vigorously oppose any litigation if settlement talks break down, their lawyers said.

“No one is certain of recovery in this court or any other court,” said Gerard Uzzi, an attorney representing members of the Sackler family.

Purdue’s previous bankruptcy settlement was supported by attorneys general from all 50 states, as well as local governments and the large majority of individual opioid victims who voted for it. But he also had critics, including Carrie McGaha, who had repeated overdoses and said Tuesday that people have been placed at the “bottom of the heap” throughout Purdue’s bankruptcy.