red lobster

Red Lobster Files For Bankruptcy After Shutting Down Dozens Of Their Restaurants

Red Lobster has filed for Chapter 11 bankruptcy protection just days after closing down dozens of their restaurants throughout the US. 

The US seafood restaurant chain has been financially struggling due to lease and labor costs, and a customer demand that the chain has not been able to afford to keep up with. This, reportedly, added to the millions of dollars they lost. 

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In a court filing, Red Lobster stated that it had over 100,000 creditors and estimated assets between $1 billion and $10 billion. The company’s predicted liabilities are also between $1 billion and $10 billion. 

The court document was signed by CEO Jonathan Tibus. Tibus is a corporate restructuring specialist who took the position at Red Lobster in March. 

TAGeX Brands, a restaurant liquidator, announced last week that it is gearing up to auction off the equipment from over 50 Red Lobster locations that were recently closed down as a result of the chain’s “footprint rationalization.”

The closed down locations span over 20 states, and have drastically changed the presence of Red Lobster in cities like Denver, San Antonio, Sacramento, and Indianapolis, according to the Guardian

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Red Lobster was founded in Orlando, Florida by Bill Darden. Darden’s initial vision for the restaurant was to bring affordable and accessible seafood restaurants to families across the nation. 

In 1970, Darden sold Red Lobster to General Mills. Later on, General Mills formed Darden Restaurants, which owns chains such as Olive Garden, and in 1995, they spun the company off.

Rising lease and labor costs are just one of the reasons Red Lobster had to file for bankruptcy. Increasing competition from other successful chain restaurants, such as Chipotle, has also contributed to the seafood restaurants losses. 

They’re famous meal deals, such as all-you-can-eat shrimp and lobster packages, became extremely expensive for Red Lobster to keep up with. 

More recently, last year’s Ultimate Endless Shrimp promotion, which offered al-you-can-eat shrimp for $20, caused the chain to lose millions of dollars, according to reports

“We knew the price was cheap, but the idea was to bring more traffic to the restaurants,” Ludovic Garnier, the chief financial officer of Thai Union Group, Red Lobster‘s former co-owner, said.


Real Estate Developer Evergrande’s Bankruptcy Could Lead To Housing Crisis In China 

Evergrande was known for decades as one of China’s most successful real estate developers, however, as China’s economy struggled within the past few years, the developer acquired debt, leading to their bankruptcy in the US. 

The demand for housing in China was so strong that builders would pre-sell apartment units before they completed construction. Shifts in policies in China within the last two years have also left property developers without a lot of money, leading to a lot of risky financial decisions. 

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In 2021, the central government tried to curb excessive borrowing to slow the rise of home prices, which led to the removal of funding for property developers. Evergrande acquired $300 billion in liabilities, which it wasn’t able to pay, leading to market panic. 

Building and construction was then suspended for dozens of projects, leading to many buyers who pre-purchased housing with no new home and a mountain of debt. 

Evergrande filed for Chapter 15 bankruptcy last Thursday, which is a way for foreign companies to utilize US bankruptcy laws to restructure their debt, which takes time and Evergrande has around $19 billion in offshore debts.

The next step for the developer will be to restructure those billions of dollars in offshore debts which could have a major impact on the financial system in China. 

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Other large builders and developers in China have also been struggling to cope with the now low demand for housing.

China’s property and housing market accounts for around 30% of the nation’s economic activity, as well as two-thirds of general household wealth. 

The “zero Covid” strategy in China has also hindered its economic growth, leaving many potential buyers skeptical when it comes to buying new homes and investing in real estate in general. Unemployment levels are also on the rise while property values fall. 

Beijing has worked to increase demand for housing and provide cash for developers in need, however, it’s not nearly enough, and state-funded bailouts seem to be on a massive decline in general. 

“We must maintain historic patience and insist on making steady, step-by-step progress,” President Xi Jinping said in a recent speech.


Bed Bath & Beyond Files For Bankruptcy, Closing Hundreds Of Stores 

Bed Bath & Beyond announced Sunday that it filed for bankruptcy, stating that they will be closing its remaining 360 Bed Bath & Beyond stores and 120 buybuy Baby locations. Within the past year the company has closed around 400 stores.  

Chain department stores such as TJ Maxx and HomeGoods have begun deals to take over the retail spaces, as well as gyms. The vast spaces of Bed Bath & Beyond stores offer a unique opportunity for commercial real estate. 

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“E-commerce scared a lot of people off from building retail,” said Brandon Isner, the head of retail research at CBRE, a commercial real estate firm, to CNN

“A lot of great real estate is going to come available into a market where there’s been no vacancies. It will not take long for retailers to occupy those spaces.”

“For us, the biggest source of new store locations comes from other retailers closing stores. So many of our most productive locations were formerly Circuit City or Toys ‘R’ Us or Sports Authority,” Burlington CEO Michael O’Sullivan said.

New commercial real estate construction has decreased vastly within the last couple of years, and retail store spaces have also been scarce, so the availability of these large building spaces could be a new opportunity for major retailers. 

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Bed Bath & Beyond has stores in all 50 states, a majority of them are in the most populated areas of the country. A majority of the stores are also located in large cities and mid-size suburbs. These are all good qualities for retailers looking to expand their spaces in a prime location. 

“There is good interest for Bed Bath & Beyond stores that are closing given desirable locations and an average size of around 30,000 square feet,” retail analysts from Telsey Advisory Group said.

“In some cases, landlords are also eager to replace old Bed Bath & Beyond leases because the company was paying below-market rent in certain locations,” Telsey Advisory Group analysts said.

“Bed Bath and Beyond sites are interesting to us, and we are exploring available opportunities with our franchisees,” a spokesperson told CNN.

Real Estate Scam

The Tiny Detail That Led to a Million Dollar Real Estate Scam

Many of us would like to believe we could spot a scam from afar, especially an email scam. There are only so many people that the Prince of Nigeria can give money to!

However a multinational fraud ring were able to swindle nearly $1 million out of the CEO of an unidentified Swiss company.

“S.K.” was purchasing some beachfront property in Belize when the fraud was committed, according to a criminal complaint that was unsealed recently.

The seller had been in discussions with S.K. with the buyer already paying a deposit on the $1,020,000 property. So when S.K. received a further email from the seller’s lawyers requesting the remaining $918,000 he wired the money across to the bank account he thought was also in Belize. However the money was sent to a Citizens Bank in Boston.

The complaint states, “The lengthy email which S.K. received included lawyerly verbiage that gave it the appearance it was from the attorney in Belize. The author included information about Belize-specific regulations on the purchase of property by a foreign company. The email included the standard confidentiality notice and legal disclaimers that are commonly part of emails from attorneys. Lastly, it included a professional signature block with the attorney’s name and contact information.”

It was when the real lawyer got in contact with S.K. to query why the money had not been sent across to them that the scam was discovered.

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An investigation revealed that the email from the “lawyer” had an extra “s” in the address, meaning the fake email was “deliberately created to deceive the recipient into believing he was communicating with the seller’s attorney.”

Recent data from the FBI’s Internet Crime Complaint Center shows that “CEO fraud” – or business email compromise – was responsible for a loss of over $26 billion for businesses during June 2016 and July 2019, and affected all 50 US states as well as nearly 180 countries.

In 2015 Christopher Sinclair – Mattel’s CEO – emailed an employee requesting $3 million be transferred to a new Chinese vendor. As their company policy demanded any transfers of money required approval by two upper-level managers the employee complied. However when mentioning the payment to Mr. Sinclair later he was unaware of the incident. And while the bank, police and FBI were promptly called it took a long time for the company to have their money returned.

Similarly, an unidentified US defense contractor was conned into sending sensitive military equipment worth millions of dollars to a gang of international con artists. Court filings show that some of the equipment was so top secret nobody was supposed to be aware it existed with the “highly sensitive” equipment was valued at $3.2 million.

Scammers usually create false email accounts with similar addresses to the legitimate accounts that they have hacked into and generally target employees who have access to the business’s accounts, high-level executives and sometimes celebrities.

Once the information has been removed from the hacked email accounts the scammers not only steal names, account details and information about the financial transaction, they also analyze the style and tone of the messages to ensure their fake email is plausible.

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They then email the buyer requesting the next payment be wired to a bank account they look after, with the money disappearing immediately.

Online crime has been around for many years however these scams have only been noticed in the last five years. An FBI supervisory special agent was quoted as saying, “There are always digital artifacts left behind in online scams – IP addresses used to illicitly access someone’s email, for instance – and this data is often used not only to track down individual suspects but also to make connections between schemes that may not otherwise appear to be linked.”

The stolen money from S.K. was transferred almost immediately to corporate accounts at JPMorgan Chase as well as Bank of America in Atlanta. A further $200,000 was then sent to banks in Nigeria and China while a suspect was spotted withdrawing thousands of dollars in cash at several JPMorgan Chase branches.

Investigators discovered the accounts in Atlanta had been opened by “Prince Okoli” who had also paid $10,000 into his own personal account. Surveillance photos at the Atlanta banks were compared to Okoli’s driving license and they realised they had a match. When pushed for a comment Andrew Wong, Okoli’s court-appointed lawyer – would not respond.

Although scammed consumers have limited liability with losses often covered by the financial companies involved, corporations sending money to incorrect recipients are not normally covered. When filing for Chapter 11 protection earlier this year, fashion brand Diesel USA cited cyber fraud losses as one of their reasons for bankruptcy.

There are recommendations from the FBI for companies to have protocols in place so that requests for large sums of money require strict verification, such as two-factor authentication.

They also recommend you always inspect your emails for incorrect or misspelled URLs, misspelled names or information that does not quite look right. Never give out information that could be used against you to new contacts without vetting them independently first.


U.S. Supreme Court Rejects Arizona Lawsuit Against Purdue Pharma

The Sackler Family, more commonly known as the owners of Purdue Pharma LP, have been at the center of a massive epidemic that has claimed the lives of almost half a million Americans within the past decade. The opioid crisis has been an ongoing issue that has recently been thrown into the spotlight because of the multiple lawsuits that seem to appear every day against the former billion dollar pharmaceutical company. Just recently, the U.S. Supreme Court turned away a case from the state of Arizona which sought to recover billions of dollars from the Sackler Family, after they claimed the family was funneling the money out of the company for themselves, months before Purdue filed for bankruptcy

Arizona Attorney General Mark Brnovich was the individual who pursued this specific case against Purdue, according to Reuters. His case’s overall goal was the same as the thousands of other lawsuits filed against the company within the past year; to hold Purdue accountable for their role in the opioid epidemic, and lack of action to protect the lives of hundreds of thousands of Americans. Brnovich’s specific suit accused eight members of the Sackler family of funneling out up to $4 billion throughout a period of eight years (2008 to 2016). Brnovich believes the family funneled out the money because they were aware of the potential liabilities its marketing of opioids instilled, so to make sure they’d be financially secure when all of those liabilities came to light, they slowly made a cushion account for themselves. 

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“Brnovich argued that the national importance of holding those responsible for the opioid crisis accountable justified taking the case directly to the justices,” Reuters reported. 

As previously mentioned, there are currently thousands of lawsuits that are being worked through against Purdue. The suits range from state, county, and even city-wide in terms of severity, but they all seek the same thing that Brnovich wants, holding the Sacklers accountable for their major role in the U.S.’s opioid addiction crisis. A majority of the lawsuits make the same claim, that Purdue “deceptively market[ed] opioids by overstating their benefits and playing down the risks.”

As a response to the lawsuits, Purdue has already filed for Chapter 11 bankruptcy in September of this year. The filing came after the company had already reached a deal that holds them accountable for $10 billion to be distributed depending on the severity of each suit. As of September 2019, when this deal was proposed, 23 states had filed a suit against Purdue, and about 2,000 individual cities did as well. 

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The original proposed deal only cited that Purdue pay $3 billion to the thousands of plaintiffs over the course of several years; however, over half of the states with opened lawsuits refuted that original deal. They refuted after claims were made that the Sackler family was worth well over three times that amount, and owed more when compared to the amount of lives lost and destruction caused by the family’s willful ignorance. 

After the $10 billion proposal deal, a federal bankruptcy judge placed a hold on every city and state-wide case against the company and family. However, Arizona and Brnovich didn’t want to wait any longer, so they continued the fight, only to be declined by the Supreme Court this week. The federal bankruptcy court and Purdue’s lawyers wanted Arizona’s case, amongst others, to remain in bankruptcy court as opposed to the Supreme Court. Arizona and Brnovich aren’t satisfied with keeping the case in the lower courts, as they wanted higher up federal action. 

“The states of Ohio, Alaska, North Dakota, Louisiana and Utah supported Arizona. Brnovich’s case relied upon language in the U.S. Constitution giving the Supreme Court ‘original jurisdiction’ over disputes in which a state is a party, meaning states can file a lawsuit at the high court instead of litigating first in lower courts,” Reuters reports.

Coconut Milk

A Mixture of Lost Contracts Plus The Growth of Non-Dairy Milk Products Sees America’s Largest Milk Producer File For Bankruptcy

It was announced on Tuesday that the country’s biggest milk producer – Dean Foods – has filed for Chapter 11 bankruptcy protection, sparking fears for farmers everywhere.
Based in Dallas, Dean Foods have had to secure $850 million commitments in debtor-in-possession financing, which is a form of funding companies suffering financial difficulties can acquire. However the company will be utilizing the Chapter 11 proceedings to enable them to address their debt as well as their unfunded debt obligations, all while they aim to keep their business operating.

It is believed there will be no breaks in any of their customers’ orders and all dairy products should be delivered as per their usual contracts. Concerns were raised regarding their employees however as it was revealed that the company has not been funding all their workers’ pensions.

The organization also confirmed that they had executed a strategic review in September and have opted to keep the company operating rather than selling it off. Yet they have also announced they are currently in ‘advanced discussions’ with Dairy Farmers of America and are looking to potentially sell a ‘substantial’ amount of its assets. If this is the case the transaction would still have to accept other offers of purchase while working through their bankruptcy stage.

It appears that as a nation our dietary habits are changing, with more and more people either suffering from lactose issues, choosing a healthier or even vegan diet, or preferring to opt for private label products.

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A combination of these has resulted in the per capita consumption of milk to drop 26 per cent in the last 20 years although 2019 has been particularly difficult for the company. Sales have fallen 7 per cent in the first six months of the year resulting in a drop in profits of 14%. There has also been 80% of its stock lost this year despite being the producers of some of our most popular dairy and milk labels – including Organic Valley, Land O’Lakes milks and Dairy Pure.

The demand for cow’s milk in recent times has been consistently reducing each year with sales for the last 52 weeks up to October 26 hitting $12 billion globally – according to CNN Business. Compare this to the $15 billion made in a like-for-like period during 2015 it is easy to see that the dairy companies cannot survive producing purely cow’s milk. However the smaller market of oat milk has increased by 636 per cent in the last 12 months taking sales to around $53 million, showing there clearly is a shift in America’s drinking habits.

And although the global market looks to be hitting $18 billion this year for milk alternatives – an increase of 3.5 per cent from last year – the traditional milk market will still outperform it by a considerable sum with around $120 billion expected worldwide.

The recent decision by Walmart in 2017 to move to their own milk supply subsequently led to the Dean Foods having to terminate over 100 contracts across eight states, leaving dairy farmers also in a dire financial situation as they tried to replace their deals.

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A year later Food Lion also cut ties with the company resulting in Dean Foods reporting a net loss for seven out of its last eight quarters.

The news will come as a shock to the country’s farmers who are already trying to cope with the ever changing market thanks to a labor shortage and trade issues. Add to that the consistently dropping dairy prices and it is no wonder many farmers themselves are also being forced to close their businesses.

Eric Beringause, who took over as President and Chief Executive Officer of Dean Foods in September announced:
‘The actions we are announcing are designed to enable us to continue serving our customers and operating as normal as we work toward the sale of our business. Despite our best efforts to make our business more agile and cost-efficient, we continue to be impacted by a challenging operating environment marked by continuing declines in consumer milk consumption.’

Senior Vice President of Communications for the lobbying group released a statement to CNBC stating:
‘A number of [the National Milk Producers Federation’s] member cooperatives provide milk to Dean Foods and could be impacted by today’s bankruptcy filing. We are gathering information to better assess the situation and will work closely with our members to provide whatever support we are able to through this process.’

Dean Foods has enjoyed a ‘history of goodness’ for 94 years since it was founded in 1925 by Samuel E. Dean Sr. after he procured evaporating milk processing company Pecatonica Marketing Company. After changing its name in 1927 to Dean Evaporating Milk Company a relationship was born between the Dean name and the ‘wholesome, healthy sources of nutrition’. By 1929 the name would change again to Dean Milk Company, finally settling on Dean Foods in 1963.

Toys R Us

Toys R Us Is Ready For Its Comeback! Thanks To Some Help From Target

Toys R Us made headlines last year with their devastating bankruptcy announcement that left tens of thousands unemployed. The brand may be gone in the retail sphere, but they’re making a comeback in the digital world that might just keep the whole business alive. The internationally recognizable toy brand has re opened their online website just in time for the holiday season. The website, however, is now more of an online window shopping experience without any direct means of purchasing, basically a huge online catalog. Instead, when you go to purchase a toy listed, you’ll be redirected to the product listing on Target’s website. Target now powers the Toys R Us brand and runs the entire website. In fact when you go to Target’s website from the listings, a huge banner appears that says “Toys R Us, now powered by Target.” 

The actual Toys R Us website is totally different from its previous retail format, and now radiates the essence of an online toy magazine. Meaning the website is fully equipped with the hottest toy trends, articles about up and coming products, in depth consumer reviews, and of course, links to every product listing so readers can make purchases as they’re reading about the holidays hottest game trends. 

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“Our U.S. strategy is to bring back the Toys R Us brand in a modern way through a strong experiential and content-rich omni-channel concept. Target will help us deliver on that experience with its toy assortment, digital strength and ability to deliver orders to shoppers in a matter of hours,” said Toys R Us merchandising executive Richard Berry in the official release announcement

In addition, Toys R Us will be opening two experimental retail locations in Houston, Texas and Paramus, New Jersey. This is in an attempt to revive the ghost brand and give families the chance to relive the experience of going to a toy store. Since Target is now calling the shots, any products that aren’t available at the two retail locations can be ordered online and fulfilled through Target. In addition, any and all the perks that Target shoppers normally receive with their exclusive RedCard or Target Circle memberships are applicable to Toys R Us purchases as well! 

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This move is all in a greater effort to keep the household known toy brand alive. Berry started working at Toys R Us in 1985 as a cart pusher and cashier, so when he climbed the corporate ladder all the way to the top only to have a company he’s loved for decades crumble, he knew he couldn’t give up just yet. Berry is the CEO of Tru Kids Brands, the company that owns Toys and Babies R Us, and he knew he needed help if he were to keep the brand alive. He recruited Yehuda Shmidman, the former CEO of Sequential Brands Group, which oversaw the lifestyle brands Martha Stewart Living and Jessica Simpson Collection, according to CBS News. 

Since recruiting Shmidman in February, Berry was able to fulfill his goal through the Target merger and the opening of the two retail locations. The plan is to have the experimental locations a fourth the size of previous Toys R Us locations, and make the stores more consumer orientated. The aisles aren’t going to consist of floor to ceiling shelves stocked with toys of all kinds, but instead a more child friendly space that will consist of play areas to test out certain toys before purchase! 

Target’s acquiring of Toys R Us revenue is the biggest and best step that Berry could’ve done. In a world where Amazon is becoming the center of shopping everywhere and slashing its competitors in the process, business wise, partnering with one of the largest and still successful retail giants in the country should keep Geoffry the Giraffe alive for generations to come.


50,000 Union Members Go on Strike at GM

This morning, September 16, nearly 50,000 employees of General Motors went on strike at factories across the country, standing in picket lines and holding signs, according to a report from the New York Times. The strike was authorized by regional leaders of the United Automobile Workers union and was the union’s first walkout since 2007. The demands of the union for their employer echo many of the complaints expressed by working people in modern-day America: strikers want higher pay, idle plants to reopen, and jobs to be created. GM, on the other hand, wants to lower the amount of money they pay for their employees’ health care and increase employee productivity. This is the largest strike of any union on any business since 2007, which is the last time the UAW went on strike.

The UAW has the support of the Teamsters union, which is comprised of truckers, many of whom are responsible for transporting vehicles from GM’s plants to dealerships. The Teamsters union, standing in solidarity with the UAW, will not cross UAW picket lines, effectively joining them in their strike by refusing to work at GM plants where strikes are ongoing. While the UAW and GM negotiate an end to the strike, GM’s stock prices have fallen precipitously, as investors worry about the company’s financial future. While GM has enough cash, borrowing power, and inventory to sell to keep the company financially afloat for a few weeks, a strike lasting beyond that period of time could have long-lasting devastating consequences, reducing the company to junk bond status.

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Strikers complain that while GM has seen increases in profit over the past several years, their wages have not gone up in response. Although the UAW includes members from Ford and Chrysler, only GM employees went on strike because GM is the only auto manufacturer that is closing American plants. Though GM is the primary target of the UAW, the union is negotiating for terms that would benefit workers across the industry. The strike was triggered by the expiration of labor contracts over the weekend; as Ford and Chrysler were not the target of the strike, their contracts were temporarily extended. Though it’s bad for business, auto manufacturers prefer to be the first target of strikes rather than the second or third targets, as they can work to meet bargaining objectives more directly with greater flexibility, according to CNN.

The union feels particularly aggrieved because it claims that it helped save GM during the Great Recession.

Though they will not receive regular pay from GM while they are striking, workers will receive $250 per week from the union’s emergency strike fund. For these employees, the potential for higher wages upon the strike’s conclusion makes the temporary loss of income worth going on strike. One of the union’s major complaints is GM’s reliance on temporary workers, who receive fewer benefits and often don’t have a clear path to permanent employment. Additionally, the union wants a better profit sharing plan from GM and lump sum payments in addition to higher hourly wages. The union argues that while these concessions may hurt GM’s bottom line in the short term, paying employees higher wages would boost the economy overall and lead to higher productivity and quality of work.

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The union feels particularly aggrieved because it claims that it helped save GM during the Great Recession. After economic problems led sales to plunge, GM and Chrysler went into bankruptcy, being kept alive by federal bailout money. During this time, the union agreed to several concessions for GM, including reduced pay and fewer benefits for new hires, in an effort to keep the business afloat. Analysts, however, claimed that this move on behalf of the unions was made out of necessity, as bankruptcy judges have the power to break union contracts, giving employers in bankruptcy more leverage.

Democratic candidates for president have weighed in on the strike, generally offering support for the workers and unions generally. Joe Biden’s campaign tweeted that he stands with UAW, adding that jobs are about dignity and respect in addition to a paycheck. Pete Buttigieg, Bernie Sanders, and Elizabeth Warren have also expressed their support of the strike via Twitter. The strike also comes amidst legal problems for many of the union’s leaders, who have been accused of appropriating union funds for extravagant personal purchases, including a Ferrari, and may serve to draw attention away from this controversy.


Purdue Pharma Files For Bankruptcy Following Thousands of Lawsuits Over Opioid Epidemic

Purdue Pharma has filed for Chapter 11 bankruptcy this past Sunday, September 15th, in response to the thousands of lawsuits filed against the company for their contribution to America’s Opioid crisis. The company is best known for making Oxycontin, and more recently for the 2,600+ federal and state suits filed against them this year.

The specifications of the filing includes a payment plan for the company in order to settle all of the suits against them. The terms include $3 billion to be distributed among all the plaintiff’s over the course of several years from the companies owners, the Sackler’s, one of the richest families in America being worth just shy of $14 billion according to a 2016 Forbes Magazine article.

States across America are responding to the filing with great resistance, and are planning on contesting the settlements in court, the main two leading this resistance being Massachusetts and New York. The states are looking to go more directly for the Sackler’s, due to their excessive amount of wealth, and lack of sympathy for contributing to one of the countries biggest epidemics in history. According to the New York Times, twenty four states and five United States territories already agreed to the settlement after the company has worked within thousands of cities and counties in the country. 

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Activists of P.A.I.N. (Prescription Addiction Intervention Now) July 1, 2019 in Paris.

“This unique framework for a comprehensive resolution will dedicate all of the assets and resources of Purdue for the benefit of the American public. This settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation, and instead will provide billions of dollars and critical resources to communities across the country trying to cope with the opioid crisis,” Steve Miller, chairman of Purdue’s board of directors, said in a statement to the New York Times

The goal of the filing is to completely “restructure” the entire company. The specifications of the settlement include the Sackler family stepping down as owners of Purdue, while also selling their British pharmaceutical company, Mundipharma, as a means to further help pay the $3 billion cash to the plaintiffs over the course of seven years. The entire company basically wants to be reborn, and plans on actually following the restrictions on the marketing and sales of opioids, but it begs the question, just because they’re deciding to start following the rules now, does that mean they deserve the forgiveness of the countless Americans affected by the crisis? 

Many say no, hence the large amount of opposition met by this ruling. The states that have not signed on to the settlement deal, including Massachusetts, New York, New Jersey, Connecticut, Pennsylvania, California, Illinois, Virginia, Delaware, North Carolina, as well as the District of Columbia, have sued both Purdue Pharma, and the Sackler family themselves. The Sackler family may be giving up their ownership of the company, but that doesn’t take away from the billions they profited from the opioid crisis, in addition, up until the filing is complete, the family will continue to make a profit from the distribution of drugs from their British pharmaceutical company, Mundipharma.

The resistance to accepting the settlement also stems from the fact that the Sackler family filed just two days after the family was discovered to have wire transferred $1 billion through Swiss-bank accounts, suggesting the billionaires attempting to protect their wealth from the influx of litigation suits against them, according to the New York Times.

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States have also accepted the settlement promise from the company, mainly states who have sued Purdue Pharma exclusively, and not the Sackler family as well. However, without a universal agreement across all states, and considering that in a case as large as this one the states act as the plaintiffs, a federal bankruptcy judge will have to make the ultimate decision as to whether the states who have resisted have solid legal reasoning’s or if they will have to accept the terms Purdue has presented.

According to the New York Times, “New York and other states have said that Oxycontin, and opioids developed, distributed and sold by other companies, laid waste to hundreds of thousands of lives, depleting governmental resources. But throughout the two-decade-long public health crisis the Sackler family transferred billions of dollars from Purdue to shell corporations and private accounts.”

New York could see their resistance brought to court as early as this week, other states are hoping to have the same results.