Insys U.S. Trustee says disclosure statement lacks needed information

By Caroline Salls

Pittsburgh, Nov. 5 – The U.S. Trustee overseeing Insys Therapeutics, Inc.’s Chapter 11 case objected to approval of the disclosure statement for the company’s proposed plan of reorganization, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

Acting Region 3 U.S. Trustee Andrew R. Vara said in his objection that the disclosure statement does not give creditors enough information on which to make an informed judgment on the plan.

In addition, Vara said the confirmation hearing notice contained in the disclosure statement includes contradictory language regarding a creditor’s ability to opt-out of a third-party release.

The U.S. Trustee said the disclosure statement “does not contain any information signaling the debtors’ intention to enforce the third-party release as to those parties who have opted out,” and language in the confirmation notice does not mention the opt-out election.

A hearing is scheduled for Nov. 8.

The specialty pharmaceutical company is based in Phoenix. The company filed bankruptcy on June 10 under Chapter 11 case number 19-11292.

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