Bloomberg Businessweek - USA (2020-08-31)

$2.3bFederal taxes

$2b

Beacon’s

and

Rosebay’s

tax

bills

$306m

State

and

local

taxes

A

$3m

house

in

Amagansett, N.Y.

More

than

$1

billion

ended

up

in

Purdue-associated

companies

registered

in

Luxembourg

and

the

British

Virgin

Islands.

An

additional

$570

million

was

sent

to

Mundipharma

International

Ltd.,

the

Sacklers’

global

pharmaceutical

arm.

The

family

is

weighing

the

sale

of

the

business,

which

could

fetch

as

much

as

$5

billion.

...

and

Cornice,

Data,

and

Millborne

are

trustees

of

trusts

tied

to

the

Sacklers.

Linarite,

Perthlite,

and

Banela

are

each

partially

owned

by

Cornice,

Data,

and

Millborne

...

Hercules

Trust

(Beneficiaries

unknown)

Trust

for

Jonathan’schildrenTrust

for

Richard’schildren

57

The Sackler family and Purdue have proposed a settlement worth more than $10 billion with the states and cities that are suing for damages. Under the plan, the family would hand over the company to a trust controlled by the states and sell Mundipharma; the Sacklers themselves would foot $3 billion, though they continue to deny responsibility for the opioid crisis. Two dozen states have rejected the offer, including New York, Massachusetts, and Connecticut. James said New York would oppose “any deal that cheats Americans out of billions of dollars” and “allows the Sacklers to evade responsibility.” (“A critical mass of plaintiffs representing more than half of the U.S. population support the settlement framework,” Purdue said.) The bankruptcy judge in the case has paused other lawsuits against Purdue and the Sacklers until October while negotiations continue.

�With Anders Melin and Jeremy Hill

$893m

Luxembourgcompanies

$572m

MundipharmaInternational

Ltd.

$140m

BVI

companies

$88m

Companiesregisteredin

unknown

locations

Central
Eight
Realty

LLC

Cherry

Tree

Holdings LLC

... which, on behalf of Mortimer, bought ...

$3m

Rosebay

and

Beacon

received

the

bulk

of

the

Purdue

cash,

but

even

some

of

the

smallest

transactions

made

by

the

company

can

be

traced

back

to

the

family.

Three

companies—Linarite,

Perthlite,

and

Banela—were

paid

dividends

of

afew

million

each

from

Purdue

in

2012.

METHODOLOGY

○ The $10.8 billion figure is drawn from an audit report prepared by

AlixPartners LLP and Purdue. According to the report, $247 million went to loans that were repaid in full.

○ The information on cash transfers—from Purdue into Rosebay, Beacon,

Perthlite, Linarite, and Banela—and on tax payments is drawn from theAlixPartners and Purdue report (pages 27, 66).

○ Details on the ownership of Rosebay and Beacon, as described by the

attorneys general of Arizona and New York, come from a July 31, 2019,filing to the Arizona Supreme Court in

State of Arizona v. Purdue

and

affiliates

(page 5); and from a Sept. 13, 2019, filing to the Supreme Court

of the State of New York, Suffolk County, in

The People of the State of

New York v. Purdue Pharma

(page 6).

○ Particulars on the transfers from Beacon to Mortimer D.A., and the

purchase of New York real estate as described by the New York stateattorney general, can be found on page 7 of the Sept. 13 filing, in New Yorkproperty records, and in Suffolk County property records.

○ The figures for the Luxembourg and BVI companies are derived from the

AlixPartners and Purdue report (page 66) and Bloomberg News reporting.

○ Specifics on the ownership of Banela, Perthlite, and Linarite as described

by the New York state attorney general is on page 4 of the Sept. 13 filing.

○ Information on Kokino LLC’s holdings come from a November 2019 filing to

the U.S. Securities and Exchange Commission. The Sunriver ManagementLLC figure is based on Bloomberg News reporting that 20% of assetsmanaged by Sunriver are held by Kokino.

○ Details on Summer Road LLC’s holdings can be found in an August 2020 

filing to the SEC.

○ Particulars on Stillwater Holdings LLC’s holdings are in an April 2020 filing to

the SEC. The stake is valued as of Aug. 19.

What

Happens Next

Forty-eight states are suing for damages.

They’re about split between accepting and

rejecting the proposed settlement.

Data

LLC

$3m $6m

A $16m Upper

East Side townhouse(in 2004) and sold it

in January for$38m

Linarite Holdings

LLC

PerthliteHoldings

LLC

Banela Corp.

CorniceFiduciaryMgmt. LLC Millborne Trust Co.