Domino Effect

Recently we discussed the news that after making only one opioid settlement payment, pharmaceutical company Mallinckrodt may enter a repeat bankruptcy process, putting their $1.25 billion in remaining payments in jeopardy.

For many, this news was the first time that the risk of non-payment was highlighted.

Unless state and local government agencies and attorneys have made litigation financing deals, they are assuming all the payment risk associated with opioid settlements. What happens if the anticipated funds never arrive? For some, these funds will be used to recover from decades of budget-draining social programs to fight addiction. For others, the anticipated funds have already been used in budget planning for years to come.

Why is the settlement process so fraught with uncertainty and risk? The answer lies in part with the complexity and enormity of the situation. There’s also a domino effect at play, where decisions made years ago are resulting in consequences today.

Take for example the sales and production regulations introduced to reduce opioid overdoses and over prescribing. These decisions resulted in a significant decline in revenues for the pharmaceutical companies involved in the settlements. Add in a few more dominoes, such as the expenses associated extensive and lengthy litigation, and the fact that bankruptcy is often uses by companies to shield themselves from product liabilities and you have a perfect story of financial insecurity. Regardless of your opinion on the regulations, as the dominoes fall, we end up with situations like Mallinckrodt’s payment uncertainty. In turn, if they fail to make a payment, that will start a whole new chain reaction.

Finance is not the only domino to fall. The rise in deaths from fentanyl and other illicit opioids that some trace back to over regulation (Cato Institute). The devastating societal consequences of the high volume of overdoses impacting a generation of children now orphaned or being raised by extended family. Each action is a domino, pushed over by the one preceding it and impacting the future.

With many of the dominoes out of our control, the complexity and scope of the opioid crisis can feel overwhelming. At RD Legal Funding, our focus in on the piece of the story we can influence-- helping plaintiffs and attorneys cope with the timing and non-payment risks associated with complex settlements.  

If you would like to discuss your payment acceleration options, let us know. We are here to help and perhaps even stop one of those dominoes from falling in the future.

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