A Phoenix-based drug company has filed for Chapter 11 bankruptcy protection in Delaware after reaching a settlement in a lawsuit over its opioid practices.
INSYS earlier agreed to a $225 million settlement with the federal government, which alleged the company paid bribes to spur sales of opioids.
John Kapoor controls more than 60 percent of the company’s stock, which slid below $1 a share after the filing. He was convicted earlier of federal racketeering charges. He was one of Arizona’s richest residents with a fortune of more than $1 billion.
INSYS Theraputics says the filing will “facilitate the sale of substantially all of the company’s assets and address the company’s legacy legal liabilities. INSYS intends to continue operating its business in the ordinary course while it pursues these transactions through the court-supervised sale process.”
The company says it will continue to pay wages and offer continuing program and intends to pay vendors and suppliers in full.
“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,” said Andrew G. Long, CEO of INSYS Therapeutics, Inc. “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.”