This article first appeared in the American Bankruptcy Institute, November, 2014.
A divided Third Circuit Court of Appeals panel has reversed a district court ruling dismissing a shareholder’s lawsuit against individuals and a liquidating trustee involved in the dissolution of a biotechnology company and the liquidation of its assets. Schmidt v. Skolas, No. 13-3750 (3d Cir., decided October 17, 2014).
Over the last several years, a wide range of healthcare companies, among them hospitals, home health agencies and continuing care facilities, have faced financial distress as a result of declining revenues, high operating costs, reduction in reimbursements rates and increasing competition. Seeking relief, many hospitals and other healthcare companies are commencing chapter 11 cases and selling their assets to third parties in order to shed liabilities and facilitate an orderly transfer of their assets. Fairmont General Hospital, Saint Francis Hospital, Natchez Regional Medical C
The health of the healthcare industry can be summarized as follows: as go federal reimbursement rates, so goes the financial viability of healthcare providers, whether hospitals, nursing homes or medical practices.
A trustee has filed a motion requesting court approval of a bankruptcy plan that would require New England Compounding Pharmacy owners and executives to establish a $100-million settlement fund for the benefit of creditors and individuals allegedly harmed by a 2012 fungal meningitis outbreak linked to the company’s steroid injections. In re New Eng. Compounding Pharm., Inc., No. 12-19882 (Bankr. D. Mass., motion filed May 6, 2014).
2014 is expected to see significant legal developments for products manufacturers across industries. Noteworthy issues to watch for the following topics/industry groups are described herein:
Crisis Management: Have a Plan
A settlement has reportedly been reached among litigants in multi district litigation proceedings involving the bankrupt New England Compounding Center (NECC) and its insurers and creditors, including those who allegedly contracted fungal meningitis linked to the compounding pharmacy’s tainted injectable steroid products.
CASE RESULTS DEPEND UPON A VARIETY OF FACTORS UNIQUE TO EACH CASE AND DO NOT GUARANTEE OR PREDICT A SIMILAR RESULT IN ANY FUTURE CASE
A bipartisan coalition of senators from the U.S. Senate Committee on Health, Education, Labor, and Pensions has reportedly urged action on a bill (S. 959) that would give the Food and Drug Administration (FDA) additional authority over compounded drugs, which have traditionally been subject to state oversight.
Recently, an NLRB administrative law judge ruled that two policies maintained by subsidiaries of the University of Pittsburgh Medical Center (“UPMC”) violated Section 8(a)(1) of the National Labor Relations Act. See UPMC, Case No. 6-CA-81896, 4/19/13. Specifically, ALJ David Goldman found that the hospitals’ electronic mail and messaging and acceptable use of information technology resources policies impermissibly interfered with employees’ Section 7 right to engage in protected concerted activity.