Omnicare Announces Voluntary Bankruptcy Restructuring Process
Omnicare Announces Voluntary Bankruptcy Restructuring Process
Company Intends to Use Process to Implement a Standalone Restructuring or Sale Strategy
Remains Focused on Delivering Safe and Reliable Pharmacy Services to All Customers
Omnicare, LLC, part of CVS Health (NYSE: CVS), has initiated a voluntary court-supervised Chapter 11 process aimed at resolving various challenges in the long-term care pharmacy sector. This decision comes in light of ongoing litigation in the U.S. District Court. The company is leveraging this process to explore restructuring options, including a potential sale strategy.
Despite the restructuring, Omnicare remains dedicated to meeting the pharmacy needs of its clients and the residents of long-term care facilities. Throughout this court-supervised proceeding, Omnicare will continue to provide safe and reliable pharmacy services, ensuring that its customers and patients experience no disruption in accessing necessary clinical services.
David Azzolina, President of Omnicare, emphasized the company's commitment to quality service. He stated, "Omnicare has a proud history of delivering high-quality pharmacy and clinical care solutions to long-term care providers and their residents. Recent legal challenges include a civil lawsuit relating to technical violations of pharmacy law, despite the absence of allegations concerning harm to any Omnicare patients." He noted that the penalties imposed by the District Court were perceived as extreme and potentially unconstitutional. To address these concerns and other issues, the company is taking responsible steps to ensure the continued provision of essential pharmacy services.
Mr. Azzolina further expressed, "Supporting our customers and residents remains our utmost priority. As we navigate this process, we are unwavering in our commitment to providing optimal care. We deeply appreciate our facility and senior living community partners for their support. Furthermore, I extend my gratitude to the dedicated Omnicare team whose passion is evident in their commitment to delivering a high standard of service."
Additional Information About the Court-Supervised Process
Omnicare has kicked off voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court. In conjunction with this process, the company has secured a $110 million debtor-in-possession (DIP) financing agreement. Once approved by the court, this financing, along with cash generated from operations, is anticipated to provide sufficient liquidity for Omnicare to maintain its ongoing business obligations during this transition.
The company is also filing various customary motions seeking court approval to support its ongoing operations. If these motions are granted, Omnicare plans to honor commitments to stakeholders, including maintaining employee wages and benefits without interruption. Additionally, the company aims to continue paying vendors and suppliers in full for goods and services provided after the filing date.
Further information concerning Omnicare's court-supervised restructuring process will be available through the established company channels.
Advisors on the Process
Legal counsel for Omnicare includes Jenner & Block LLP and Haynes Boone, with Houlihan Lokey serving as investment banker and Alvarez & Marsal as restructuring advisor.
About CVS Health
CVS Health is a prominent health solutions provider focused on creating a world of health around every consumer. With approximately 9,000 retail pharmacy locations and over 1,000 walk-in clinics, CVS Health continues to serve millions of people through various health insurance products and services. The company emphasizes a personalized approach that increases access to quality care while lowering overall healthcare costs.
About Omnicare
Omnicare stands as a leading national provider of pharmacy services dedicated to the long-term care market. The company's mission addresses the needs of an aging populace, delivering essential pharmacy services to skilled nursing facilities, independent living, and assisted living communities.
Media Contacts
CVS Health
Ethan Slavin
860-273-6095
Omnicare
Meaghan Repko
212-355-4449
Frequently Asked Questions
What prompted Omnicare to initiate Chapter 11 bankruptcy?
Omnicare initiated Chapter 11 to address legal and financial challenges, allowing for restructuring while maintaining services.
Will pharmacy services continue during the restructuring?
Yes, Omnicare is dedicated to continuing its pharmacy services without disruption during the restructuring process.
How is Omnicare ensuring liquidity during this time?
The company secured $110 million in debtor-in-possession financing to manage its obligations during the bankruptcy process.
What is Omnicare's commitment to its employees?
Omnicare plans to maintain employee wages and benefits without interruption as part of its restructuring strategy.
How is CVS Health involved with Omnicare?
Omnicare is a subsidiary of CVS Health, which supports its operations and strategic direction during this transition.
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