Insys Wins Court Approval Of Bankruptcy Plan
After months of court proceedings, Valley-based Insys Therapeutics has won court approval of a bankruptcy plan that pays less than a dime for each dollar it owes for damages related to the opioid crisis.
Shareholders will be wiped out under the approved Chapter 11 plan.
Insys is the first drugmaker driven to bankruptcy by fallout from the opioid epidemic.
The company filed for bankruptcy protection in June, after reaching a settlement with the Justice Department that included convictions of company principals of federal racketeering charges.
The Justice Department agreed it won’t collect on its $243 million claim until trade suppliers and those with drug damage claims are paid at least 4 cents on the dollar of what they are owed.
Attorneys for Insys call this approved bankruptcy plan a “monumental success” as it includes barring shareholders from suing Insys for settlement dollars.