Opioid manufacturer Insys Therapeutics filed for Chapter 11 bankruptcy protections Monday, just days after pleading guilty to federal fraud charges and agreeing to pay $225 million to settle civil and criminal cases alleging it used kickbacks, bribes, and even a lap dance to sell its extremely potent painkiller.
Insys may be the first major opioid maker to go down in a deluge of lawsuits over the opioid epidemic—it faces more than 1,000 lawsuits from municipal governments. But the bankruptcy throws into question just how much the company will actually pay the federal government from the $225 million deal it made on June 5. Bankruptcy documents show that, as of March 31, Insys had just $175.1 million in assets and $262.5 million already in debt.
In an email to NPR, Insys CEO Andrew G. Long defended the bankruptcy decision, saying, “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.”