This audio is generated automatically. Please let us know if you have comments.
Diving brief:
- The subsidiary CVS Pharmacy Services Omnicare filed a bankruptcy file in chapter 11 after being struck by a $ 949 million in federal judgment on the inappropriate billing of government health programs.
- Omnicare claimed up to $ 500 million in assets and between $ 1 and $ 10 billion in debt in its bankrupt request with a Texas court on Monday.
- Omnicare has negotiated an agreement to receive $ 110 million in debtor funding in possession, a type of loan which, according to him, will allow him to continue to operate thanks to the bankruptcy process, said the company.
Diving insight:
In July, a federal judge ordered Omnicare to pay $ 948.8 million in penalties and damages after having determined that the company, which provides pharmacy services with long-term care and post-sued establishments, illegally charged the US government for prescription drugs. The decision, which CVS said it was planning to appeal, sent Omnicare in shock – the company would have hired a consulting firm to help strengthen operations, according to Bloomberg.
Omnicare now requests the protection of Chapter 11, which should interrupt the government’s efforts to receive the payment of $ 949 million. Bankruptcy will help Omnicare to reorganize its finances, which could include a potential sale, the company announced on Monday in the press release.
“The company also intends to use this process to meet other financial challenges faced by the larger long -term care pharmacy industry and to assess its restructuring options, including the implementation of a restructuring or autonomous sale strategy,” said Omnicare.
Omnicare intends to continue to provide services to its customers and said that bankruptcy should not affect regular operations, including wages to employees.
Publisher’s note: This is a development story and will be updated.
