Insys files bankruptcy to sell assets, address legacy liabilities

By Caroline Salls

Pittsburgh, June 10 – Insys Therapeutics, Inc. filed Chapter 11 bankruptcy on Monday in the U.S. Bankruptcy Court in the District of Delaware to facilitate the sale of substantially all of the company’s assets and address its legacy legal liabilities, according to a news release.

Insys said it intends to continue operating its business in the ordinary course during the court-supervised sale process.

The company said it intends to use existing cash on hand and operating cash flows to support its continued operations, including payment of all employee wages and benefits without interruption and continuing programs offered to customers. Vendors and suppliers will be paid in full under normal terms for goods and services provided after the bankruptcy filing date.

“After conducting a thorough review of available strategic alternatives, we determined that a court-supervised sale process is the best course of action to maximize the value of our assets and address our legacy legal challenges in a fair and transparent manner,” chief executive officer Andrew G. Long said in the release.

“Insys has compelling assets and a highly talented team. We believe this process will provide us with a forum to negotiate an equitable resolution with our creditors and represents the best opportunity for our people and our business.”

Insys said it aims to complete the asset sales within 90 days and address creditors’ claims as expeditiously as possible.

According to court documents, Insys had $175.11 million in assets and $262.5 million in debt as of March 31.

The company’s largest unsecured creditors are the Department of Justice, which Insys said will have a $243 million settlement claim; the U.S. Attorney’s Office for the District of Massachusetts, based in Boston, with a $30 million litigation claim; Wilkinson Walsh and Eskovitz LLP of Washington, D.C., with an $8.89 million indemnity claim; King & Spalding of Washington, D.C., with a $2.16 million indemnity claim; Nixon Peabody LLP of Boston, with a $1.18 million indemnity claim; and White & Case LLP of Boston, with a $1 million indemnity claim.

Weil, Gotshal & Manges LLP is serving as legal counsel to Insys, Lazard Freres & Co. LLC is serving as investment banker, and FTI Consulting, Inc. is serving as financial adviser.

The specialty pharmaceutical company is based in Phoenix. The Chapter 11 case number is 19-11292.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.