Purdue Pharma Shutdown 2026, $5.544 Billion Criminal Sentence, $7.4 Billion Settlement and Purdue Personal Injury Trust Payments Explained

Purdue Pharma L.P., the maker of OxyContin, was sentenced in federal court on April 28, 2026 and ceased operating in its former form on May 1, 2026, when its Chapter 11 bankruptcy plan took effect. Its operations transferred to Knoa Pharma, LLC, a new public-benefit company. The personal injury trust created by the plan is now paying qualified claimants, but the general claim deadline has passed.

Bottom line for readers: If you already filed a Purdue personal injury claim, check your official status letter from the trust and note the 20-day appeal window. If you did not file by the deadline, the ordinary claims process is closed. The criminal sentence and the bankruptcy settlement are two separate legal obligations and should not be added together as one pot of money for victims.

Quick Facts: Purdue Pharma Sentence, Shutdown and Settlement

Item	Details
Official settlement website	purduepitrust.com (Purdue Personal Injury Trust)
Claim form	Available only through the official trust website above. The general claim deadline (July 28, 2025, 11:59 p.m. ET) and the discretionary late period have passed. Existing claimants should follow their status letters.
Defendant	Purdue Pharma L.P.
Criminal court	U.S. District Court for the District of New Jersey (Newark)
Bankruptcy court	U.S. Bankruptcy Court, Southern District of New York (Judge Sean H. Lane)
Sentencing date	April 28, 2026
Criminal penalties	$3.544 billion criminal fine + $2 billion criminal forfeiture = $5.544 billion (face amount)
Shutdown / plan effective date	May 1, 2026
Bankruptcy settlement	$7.4 billion (about $900 million from Purdue and up to $6.5 billion from the Sackler family over 15 years)
Successor company	Knoa Pharma, LLC (public-benefit company owned by the nonprofit Knoa Foundation)
Initial trust awards (qualified claims)	Non-NAS Tier 1: $16,294; Non-NAS Tier 2: $8,147; NAS: $25,653 (before attorney fees, costs and liens)
Appeal window for status determinations	20 days from issuance of the status correspondence

What Happened: Purdue Pharma’s Criminal Sentence

Purdue Pharma was sentenced in federal court in Newark, New Jersey on April 28, 2026. The sentence followed the company’s November 2020 guilty plea to three federal felony offenses:

1. Conspiracy to defraud the United States (18 U.S.C. § 371), including impeding the Drug Enforcement Administration’s oversight of opioid manufacturing quotas.
2. Violating the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 331), through conduct involving misbranding.
3. Violating the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)), through payments intended to induce healthcare providers and an electronic health-record vendor to promote Purdue’s opioid products.

The Department of Justice said the conduct included misleading the DEA about Purdue’s ability to prevent prescription drug diversion, using prescriptions written by providers suspected of diversion to support higher quotas, and paying providers and an electronic health-record platform to push opioid prescribing. The charges reached conduct dating back to 2007.

This was not Purdue’s first federal conviction. In 2007, Purdue and three executives pleaded guilty to federal charges related to the misbranding of OxyContin.

What the $5.544 Billion Sentence Covers

Criminal penalty	Amount
Criminal fine	$3,544,000,000
Criminal forfeiture	$2,000,000,000
Combined face amount	$5,544,000,000

Two points matter for accuracy:

• The Justice Department provided that the criminal fine would be assessed in connection with the bankruptcy proceedings, and that Purdue could receive a credit of up to $1.775 billion against the forfeiture based on value delivered through the bankruptcy restructuring, provided Purdue ceased operating in its former form and emerged as a public-benefit company or similar entity.
• The $5.544 billion figure is the combined face amount of the fine and forfeiture. It is not a new, separate cash payment on top of everything committed in the bankruptcy, and criminal penalties are not the same thing as compensation paid to victims.

The 2020 federal resolution also included a separate civil settlement with the Department of Justice of about $2.8 billion under the federal False Claims Act, and a separate civil settlement with members of the Sackler family. These were part of the broader 2020 federal resolution and are distinct from the 2026 sentence.

Did Purdue Pharma Dissolve? Knoa Pharma Explained

Purdue’s shutdown was part of the bankruptcy plan that became effective on May 1, 2026. Under the restructuring, Purdue ceased operating under its former structure and its assets and manufacturing operations transferred to Knoa Pharma, LLC.

• Knoa is owned by the nonprofit Knoa Foundation and overseen by independent directors and trustees not associated with Purdue.
• The settlement bars members of the Sackler family from selling opioids in the United States and from participating in the new company.
• Operating restrictions limit opioid marketing and lobbying and bar the use of opioid sales metrics for employee compensation. An independent monitor oversees compliance.
• Knoa may continue manufacturing medications, including opioid products, within these restrictions, with excess revenue directed toward opioid prevention, treatment and recovery.

Purdue’s shutdown does not mean every opioid lawsuit or payment process ended on May 1, 2026. Trust administration and post-confirmation bankruptcy matters remain active. On October 8, 2026, the Southern District of New York Bankruptcy Court listed a further Purdue-related ruling concerning enforcement of the confirmation order.

Background: From the 2019 Bankruptcy to the Supreme Court

Purdue filed for Chapter 11 bankruptcy in the Southern District of New York in September 2019 to address thousands of lawsuits brought by states, local governments, tribes, hospitals and individuals over the opioid epidemic.

The first plan proposed a settlement of roughly $4.5 billion from the Sackler family in exchange for nonconsensual third-party releases, meaning legal protection from civil claims even for claimants who did not agree. After the bankruptcy court confirmed that plan in 2021, a federal district court vacated it, the Second Circuit later reinstated it, and the U.S. Supreme Court agreed to review it.

On June 27, 2024, the Supreme Court ruled 5-4 in Harrington v. Purdue Pharma L.P., 603 U.S. 204 (2024), that the Bankruptcy Code (specifically the catch-all provision in 11 U.S.C. § 1123(b)(6)) does not authorize a court to approve a plan releasing claims against non-debtor third parties without the consent of the affected claimants. The Court did not decide whether a plan could be approved where all affected claimants consent, and it did not address consensual release structures.

The parties then negotiated a revised arrangement with state attorneys general. The bankruptcy court approved Purdue’s Eighteenth Amended Joint Chapter 11 Plan on November 18, 2025, and the plan became effective on May 1, 2026.

The $7.4 Billion Purdue-Sackler Settlement

The bankruptcy settlement is separate from the criminal sentence.

• Total: $7.4 billion.
• Sources: approximately $900 million from Purdue and up to $6.5 billion from Sackler family members over time.
• Payment schedule: more than $1.5 billion at the start of the plan, then approximately $500 million in May 2027, $500 million in May 2028 and $400 million in May 2029, with the full settlement structured over 15 years.
• Use of funds: opioid prevention, treatment, recovery and other approved purposes, through state and local governments, tribes and approved trusts, plus compensation for individuals through the personal injury trust.

The criminal sentence and the $7.4 billion settlement are different legal obligations within a broader restructuring. They should not simply be added together to suggest a new total amount available to victims.

For earlier coverage, see our existing article: Oxycodone Lawsuit, $7.4 Billion Settlement Approved: Purdue Pharma Who Make OxyContin & Sacklers Ordered to Pay After Supreme Court Rejection.

Purdue Personal Injury Trust: Who Is Being Paid

The Purdue Personal Injury Trust’s September 30, 2026 update is the most current source for people who already filed claims.

• The trust was funded when the plan became effective on May 1, 2026.
• It has been reviewing deficient claims, sending status letters and paying claimants whose claims are determined to be qualified and allowed, on a rolling basis.
• The trust anticipated that most currently qualified and allowed claimants would receive some portion of their awards by the end of 2026.
• The general claim deadline was July 28, 2025, at 11:59 p.m. Eastern Time. The discretionary late period has also passed. This is not a new open claim period.

Initial Distribution Amounts

Claim category	Initial distribution
Non-NAS personal injury, Tier 1	$16,294
Non-NAS personal injury, Tier 2	$8,147
Neonatal abstinence syndrome (NAS) personal injury	$25,653

These amounts apply only to the defined categories under the trust distribution procedures and are not guaranteed to everyone affected by the opioid crisis. The trust states the figures reflect trust-level deductions for operating expenses, professional fees and other plan assessments, and are before any individual attorney fees, costs and medical liens. A second payment may be possible after remaining contingencies are resolved, but the trustee has not guaranteed another distribution or a specific amount.

What Existing Claimants Should Do Now

1. Find your status letter. Check the email and mailing address on file with the trust. The letter says whether your claim is qualified and allowed, deficient, or ineligible.
2. Watch the 20-day appeal window. The trust describes a 20-day appeal process for specified claim-status determinations, which begins when the status correspondence is issued. Read letters promptly.
3. Contact your attorney if you have one. Represented claimants should ask their attorney about the letter, fees, liens and payment timing.
4. Keep your contact details current with the trust so payment and notices are not missed.
5. Use only official channels. Be cautious of anyone charging a fee to “file” or “unlock” a Purdue claim.

Who Is Not Automatically Eligible

Do not assume everyone whose family was affected by OxyContin is automatically owed a trust payment. The distribution procedures require specific claim filings, supporting evidence and approval. Government recipients (states, local governments and tribes) receive funds separately and use them for abatement programs rather than individual payments.

Is the Sackler Family Protected From Lawsuits?

The 2024 Supreme Court ruling barred the earlier plan’s nonconsensual releases. The revised plan relies on a structure designed to comply with Harrington, and the Sackler payments are made under the plan’s terms. Whether and how any particular claim against a non-debtor can proceed depends on the plan documents, the claimant’s participation, and court rulings, including post-confirmation enforcement matters. This is a legal question to raise with a licensed attorney.

Legal Takeaways for Future Mass Tort Bankruptcies

• Bankruptcy courts cannot use § 1123(b)(6) to grant nonconsensual releases to non-debtors such as owners or executives.
• Settlement structures now lean on creditor consent, opt-in or opt-out mechanics, and payment commitments that do not rely on forced releases.
• Criminal penalties (fines and forfeiture) and civil/bankruptcy compensation operate on separate tracks, with different recipients and different purposes.

Key Dates

Date	Development
2007	Purdue and three executives plead guilty to federal OxyContin misbranding charges
September 2019	Purdue files Chapter 11 in the Southern District of New York
November 2020	Purdue pleads guilty to three federal felony counts
June 27, 2024	Supreme Court decides Harrington v. Purdue Pharma L.P.
July 28, 2025	General personal injury claim deadline
November 18, 2025	Bankruptcy court approves the Eighteenth Amended Joint Chapter 11 Plan
April 28, 2026	Criminal sentence: $3.544 billion fine + $2 billion forfeiture
May 1, 2026	Plan effective; Purdue ceases operating in former form; Knoa Pharma begins; trust funded
September 30, 2026	Trust publishes claims processing update with initial award amounts
October 8, 2026	Bankruptcy court lists ruling on enforcement of the confirmation order

Frequently Asked Questions

Is Purdue Pharma still in business?

Purdue ceased operating under its former structure on May 1, 2026, when the bankruptcy plan took effect. Its operations transferred to Knoa Pharma, LLC, a public-benefit company with independent governance.

How much was Purdue Pharma sentenced to pay?

The April 28, 2026 sentence imposed a $3.544 billion criminal fine and $2 billion in criminal forfeiture, a combined face amount of $5.544 billion. A credit of up to $1.775 billion against the forfeiture may apply based on value delivered through the bankruptcy restructuring.

Is the criminal sentence the same as the $7.4 billion settlement?

No. The criminal sentence is a separate penalty. The $7.4 billion settlement is a bankruptcy resolution with Purdue and the Sackler family that funds abatement and victim compensation. The two should not be added together as one payout.

Can I still file a Purdue personal injury claim?

The trust says the general claim deadline (July 28, 2025) and its discretionary late period have passed. Existing claimants should follow their status letters and appeal instructions.

How much are Purdue Personal Injury Trust payments?

For qualified and allowed claims, initial amounts are $16,294 (Non-NAS Tier 1), $8,147 (Non-NAS Tier 2) and $25,653 (NAS), before attorney fees, costs and liens. A second payment is possible but not guaranteed.

Will every opioid victim get money?

No. Payments depend on the trust distribution procedures, timely claims and eligibility determinations. Much of the settlement goes to governments for abatement programs.

Why did the Supreme Court reject the first settlement?

In Harrington v. Purdue Pharma L.P. (June 27, 2024), the Court held 5-4 that the Bankruptcy Code does not authorize nonconsensual releases of claims against non-debtor third parties such as the Sacklers.

What is Knoa Pharma?

Knoa Pharma, LLC is a public-benefit pharmaceutical company owned by the nonprofit Knoa Foundation. It took over Purdue’s operations under independent oversight, with limits on opioid marketing and a ban on Sackler involvement.

Where can I check my claim status?

Use the official Purdue Personal Injury Trust website listed in the Quick Facts table, and check the email and mailing address on file for status letters.

How long do I have to appeal a status determination?

The trust describes a 20-day appeal process that begins when the status correspondence is issued. Read your letter promptly.

Official Sources & Primary References

1. U.S. Department of Justice: United States v. Purdue Pharma L.P., Criminal Case Information. https://www.justice.gov/criminal/criminal-vns/case/united-states-v-purdue-pharma-lp
2. New York Attorney General: Attorney General James Announces Shutdown of Opioid Manufacturer Purdue Pharma (May 1, 2026). https://ag.ny.gov/press-release/2026/attorney-general-james-announces-shutdown-opioid-manufacturer-purdue-pharma
3. Purdue Personal Injury Trust: Claims Processing Update (September 30, 2026). https://purduepitrust.com/
4. U.S. Bankruptcy Court, Southern District of New York: Judge Sean H. Lane’s Opinions. https://www.nysb.uscourts.gov/judge-lane-opinions
5. U.S. Supreme Court: Harrington v. Purdue Pharma L.P., 603 U.S. 204 (2024). https://www.supremecourt.gov/opinions/23pdf/23-124_8nk0.pdf

Verification note: This article separates Purdue’s April 2026 criminal sentence from its May 2026 bankruptcy restructuring and from the personal injury trust’s ongoing distribution process. Facts were checked against primary government, court and trust sources available through October 16, 2026. Figures and deadlines can change; confirm current details on the official trust website.

Disclaimer: This article is for informational purposes only and is not legal advice. AllAboutLawyer.com is a legal information website, not a law firm. Individual rights depend on the plan documents, deadlines and the facts of each case. Consult a licensed attorney about your situation.