Owned by the wealthy Sackler family, the pharmaceutical giant is facing thousands of state and federal lawsuits blaming its prescription painkiller OxyContin for plunging millions of Americans into addiction.
If approved by a bankruptcy judge, Purdue says that it expects the proposed restructuring to provide more than $10 billion to help tackle addiction and see the new company's profits re-directed in ways that benefit the claimants and the American people.
Purdue Chairman Steve Miller said the settlement will "provide billions of dollars and critical resources to communities across the country trying to cope with the opioid crisis."
The company has filed for reorganization under Chapter 11 of the US Bankruptcy Code and, if the proposal receives court approval, it will then dissolve and transfer its assets to a trust managed by a new governing board.
The new board will be selected by the claimants, who include thousands of municipals governments and nearly two dozen states, and will be approved by the Bankruptcy Court.
This body will then oversee the operation of the new company, including the continued sale of Oxycontin, so that its profits and assets can be used to benefit those impacted by opioid addiction.
Miller said the restructuring will avoid "wasting hundreds of millions of dollars and years on protracted litigation."