Showing posts with label bankruptcy. Show all posts
Showing posts with label bankruptcy. Show all posts

Monday, January 21, 2013

Hearing set in New England Compounding Center case

January 21, 2013

BOSTON — A hearing has been scheduled on a request for an independent trustee to oversee the bankruptcy proceedings of a firm linked to a meningitis outbreak.
The hearing on U.S. Trustee William Harrington's request is scheduled for Thursday in U.S. Bankruptcy Court in Springfield.
A steroid produced by the New England Compounding Center has been linked to a fungal meningitis outbreak that's killed 44 and sickened more than 600. The firm filed for Chapter 11 bankruptcy last month, saying the purpose was to establish a compensation fund for victims.
Harrington then requested the Chapter 11 trustee, citing reasons including the firm's "gross incompetence" and a purported conflict of interest involving the accountant the firm chose to lead it through bankruptcy.
The company opposes the request, saying it would hinder progress toward establishing the fund.
Source found here
 

Thursday, January 10, 2013

Home Tampa bay bankruptcy BlogChapter 13 Chapter 7 News Tampa Bankruptcy News Uncategorized Categorized | News The Daily Docket: K-V Pharmaceutical Unveils Bankruptcy Plan


Posted on 10 January 2013 by dmishesq
K-V Pharmaceutical, whose stock recently plummeted, has come up with a bankruptcy exit plan that will hopefully enable the struggling company to remain in business. Senior noteholders have already approved of the plan, even though it depends on a $20 million dollar rights offering. Whitebox Advisors, Pioneer Investment Management and Silver Point Capital are the key lenders working with the company on the plan. K-V Pharmaceutical originally filed for bankruptcy in August of 2012.
Read the full article here:
The Daily Docket: K-V Pharmaceutical Unveils Bankruptcy Plan

Wednesday, January 9, 2013

Meningitis outbreak: Court officer accuses NECC of 'gross mismanagement'

A federal bankruptcy court official has charged that "gross mismanagement" by officers of a Massachusetts drug compounding firm led to a nationwide fungal meningitis outbreak that has killed 40 patients, including 14 in Tennessee.
In a filing Tuesday in U.S. Bankruptcy Court in Boston, U.S. Trustee Edward K. Harrington said an independent trustee should be appointed to oversee the liquidation of the New England Compounding Center, the company blamed for the outbreak.

He said NECC's pending petition to hire one of its newly appointed board members and his company as accountant and financial advisers in the bankruptcy would create a conflict of interest.
Cited by Harrington was the fact that NECC's agreement with the proposed adviser, Keith Lowey, includes a provision allowing the current management of the company to fire him at any time without cause. As a result, he said, Lowey would be "hopelessly conflicted."
"Under such circumstances, the bankruptcy code requires that an independent Chapter 11 trustee and not a handpicked chief restructuring officer be appointed," Harrington stated in the filings.
"NECC plans to oppose the motion for appointment of a trustee. We have been told that many of the claimants will oppose the motion as well," said Dan Cohn, an attorney for NECC.
Harrington also cited NECC's officers and directors with "gross mismanagement," which he said led to the "voluntary suspension of the company's license to operate a pharmacy or compounding facility in Massachusetts."
Lawyers for NECC have asked the court to approve the appointment of Lowey and his firm, Verdolino & Lowey, at rates of up to $415 an hour.
State and federal officials have charged that NECC, based in Framingham, Mass., distributed thousands of vials of fungus-tainted spinal steroid vials to hospitals and clinics across the country, including the Saint Thomas Outpatient Neurosurgery Center in Nashville.
Figures released Monday by the Centers for Disease Control and Prevention show 664 patients have become infected from the tainted methylprednisolone acetate, 140 of them in Tennessee.
As Harrington noted, Lowey was appointed to NECC's board just prior to the filing of the bankruptcy petition late last year. He was also named as chief restructuring officer and charged with overseeing a compensation fund that would be used to pay claims of victims and their families.
Harrington cited the fact that when NECC's former president, Barry J. Cadden, was called before a congressional committee investigating the outbreak, Cadden "asserted his Fifth Amendment privilege" against self-incrimination.
The petition also notes that none of the NECC board members has resigned, "despite advising state regulators that some members of the board would do so."
Harrington wrote that Ameridose, another drug firm with the same owners, paid retainer fees for the Verdolino firm and its law firm to serve a role in the NECC bankruptcy. There is a $299,102 balance remaining on that retainer, court records show.
NECC is also seeking court approval to hire the Harris Beach law firm to act as its national coordinating defense counsel in the more than 180 pending cases. According to the petition, the Harris Beach fees and expenses will be covered by the company's insurance carrier, Pharmacists Mutual Insurance Co. The same policy covers NECC's owners, but the terms and limits of that policy were not disclosed.
Source found here


Tuesday, January 8, 2013

New boss of meningitis-linked firm is poor choice: U.S. official

By Tim McLaughlin, Reuters
Jan. 08, 2013 9:09AM PST

BOSTON (Reuters) - The person hired to run the bankrupt pharmacy linked to a deadly U.S. meningitis outbreak is "hopelessly conflicted" and should be removed from the job, a U.S. Justice Department official said on Tuesday.
William Harrington, the U.S. Trustee for Region One, argued that New England Compounding Center's board should not be able to hand-pick its chief restructuring officer.
NECC filed for bankruptcy protection last month after U.S. authorities shut down its pharmacy operations amid a meningitis outbreak that has killed 40 people and sickened 664 others, according to the U.S. Centers for Disease Control.
NECC shipped thousands of vials of a fungus-tainted steroid to medical facilities throughout the United States, according to authorities.
Before filing for bankruptcy protection on December 21, NECC's board hired Keith Lowey of Verdolino & Lowey PC to liquidate its assets and create a compensation fund for meningitis victims. NECC's ownership and board includes the suburban Boston families of recycling entrepreneur Greg Conigliaro and NECC's chief pharmacist Barry Cadden. Conigliaro's sister, Lisa, is married to Cadden.
Harrington asked the bankruptcy court to deny NECC's application to retain Lowey and his firm as financial advisers and accountants. Lowey did not return a telephone call seeking comment.
"The (chief restructuring officer) is hopelessly conflicted in this engagement due to his appointment by the board," Harrington said in a motion filed on Tuesday. "... It is essential that the debtor's affairs be managed by a truly independent fiduciary, not subject to the direct or indirect control of (NECC management)."
Harrington is the U.S. Trustee for a region that includes Massachusetts and other New England states. The U.S. Trustee Program is the component of the Justice Department responsible for protecting the integrity of the bankruptcy system.
Harrington asked the court to appoint a Chapter 11 trustee to oversee the case.
The case number for New England Compounding's Chapter 11 bankruptcy case is 12-19882-HJB.
Source found here

Sunday, December 23, 2012

: New England Compounding Center's filing shields company from creditors while it sets up compensation fund for victims The New England Compouding Company said in its filing that 130 lawsuits have been filed against it over tainted drugs.

New England Compounding Center's filing shields company from creditors while it sets up compensation fund for victims.

A pharmacy blamed for causing a deadly nationwide meningitis outbreak has filed for bankruptcy protection and said it is seeking to set up a fund to pay victims.
Contaminated steroid injections from the New England Compounding Center are thought to have been responsible for 39 deaths and 620 illnesses.
The chapter 11 filing in US bankruptcy court on Friday shields the company from the threat of creditor lawsuits while it establishes the fund.
The company said in its filing that 130 lawsuits have been filed against it and 270 other people have claimed injury from the tainted drugs.
"The number or lawsuits and demands is rising on a daily basis," the filing read. "The sheer volume and wide geographic distribution of cases bringing the prospect of chaotic, conflicting and value-destroying pretrial orders and remedies has necessitated commencing this case at this time."
Continue reading here

Thursday, December 13, 2012

KV says it is set to emerge from bankruptcy

December 13, 2012 | By

KV Pharmaceutical ($KV-A) says it is back in the game. It says it has a deal with its debtors, $85 million in financing, and if the bankruptcy court approves a reorganization plan, will emerge from bankruptcy protection more or less intact.
The announcement came a day after KV reached a $60 million arrangement with Hologic ($HOLX) settling its claim over control of Makena, KV's primary product. The first $60 million out of the pot goes to Hologic, which had tried to reclaim premature birth drug Makena after KV missed a $45 million payment in August and filed for bankruptcy.
It says its senior lenders have agreed to new terms and that it will get the so-called Debtor-in-Financing deal, essentially a high interest loan that gets paid ahead of everyone else, from a group led by Silver Point Finance.


Read more: KV says it is set to emerge from bankruptcy - FiercePharma http://www.fiercepharma.com/story/kv-says-it-set-emerge-bankruptcy/2012-12-13#ixzz2F01a1hN5
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Saturday, December 1, 2012

U.S. Attorney for S.D.N.Y. Files Complaint Against K-V Pharmaceutical Corporation Seeking Determination That Debts Are Not Dischargeable in Bankruptcy and Copy of Complaint


The United States Attorney for the Southern District of New York, Preet Bharara, filed an adversary complaint on behalf of the U.S. Government against K-V Pharmaceutical Corporation on Monday in the Southern District of New York Bankruptcy Court. The complaint seeks a judgement of the bankruptcy court (which is presiding over K-V Pharmaceutical Corporation’s chapter 11 case) that certain obligations owing to the government are not dischargeable in K-V Pharmaceutical’s bankruptcy pursuant to sections 523(a)(2), 523(a)(7) and 1141(d)(6) of the Bankruptcy Code.

Continue reading and view complaint here

K-V Pharmaceutical Owes United States $67.1M In Fines, Settlement, Lawsuit Says


by Tara Arick on November 30, 2012 · 0 comments

A U.S. attorney on Nov. 26 sued K-V Pharmaceutical Co., telling a New York federal court that the bankrupt company’s $ 67.1 million debt of criminal fines and civil settlements are nondischargeable (In Re: K-V Discovery Solutions, Inc., et al., No. 12-13346, S.D. N.Y. Bkcy., United States of America v. K-V Pharmaceutical Company, No. 12-13346, S.D. N.Y.).
Parent company K-V Discovery Solutions Inc. in October filed a Chapter 11 bankruptcy petition in the U.S. Bankruptcy Court for the Southern District of New York. At the heart of the company’s financial troubles is its inability to make scheduled payments to Hologic Inc. for the rights to the Makena preterm labor drug due to alleged market price resistance.
In its complaint filed in the U.S. District Court for the Southern District of New York, the U.S. attorney for the Southern District of New York says that in March 2010, K-V subsidiary Ethex Corp. pleaded guilty to two felony charges for failing to issue field alerts about oversized drug tablets. As part of the judgment, Ethex was ordered to pay a criminal fine of $ 23.4 million in four installments.
Installment Plan
Ethex was subsequently shut down by K-V.
The government says that K-V paid the first installment of $ 2.3 million, after which the parties modified the payment schedule with the next payment due Dec. 15. The government says that the total unpaid balance of the criminal fine is $ 16.1 million.
In addition to the criminal action, the government says that Ethex violated the False Claims Act by misrepresenting the regulatory status of certain drugs that were paid for by Medicare and Medicaid. It says that K-V and Ethex settled the whistle-blower lawsuit for payments totaling about $ 17 million.
Obligations Not Dischargeable
The government says both the criminal plea and settlement agreement provided that neither the fine nor the settlement would be dischargeable in the event Ethex or K-V filed for bankruptcy. It says that in the civil settlement, K-V agreed not to contest that the United States has a valid claim against K-V for $ 51 million.
The government says its position is that it does not have to file an adversary proceeding to obtain a determination of nondischargeability of K-V’s debts to the government. It says it filed the adversary proceeding to preserve its rights in the event the court determines such a filing is necessary to obtain an exemption from discharge.
Source found here

Wednesday, September 19, 2012

Hologic, Inc Has Filed For Relief from the Automatic Stay in K-V Bankruptcy

HOLOGIC, INC.’S has filed a  MOTION FOR RELIEF FROM THE AUTOMATIC STAY.  A hearing on that motion has been set for September 21, 2012, at 10:00 a.m. Eastern Time.  To view the motion, click here.