CVS Health subsidiary Omnicare has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Northern District of Texas following a nearly $1 billion federal judgment and mounting financial pressures.
Here are five things to know:
1. Omnicare filed for Chapter 11 protection Sept. 22 after years of financial strain, according to a CVS Health news release.
2. In July, a federal judge ordered Omnicare to pay $948.8 million in penalties and damages for submitting fraudulent claims to Medicare and Medicaid.
3. A jury in April found Omnicare’s practices caused $135.6 million in federal losses. The judgment was tripled under the False Claims Act’s treble damages provision.
4. As part of the process, Omnicare secured $110 million in debtor-in-possession financing to continue operations, including employee wages, benefits, and vendor payments.
5. Omnicare said it intends to pursue restructuring options, including a possible sale. CVS said it plans to appeal the federal court ruling.
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