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Investing.com -- CVS Health Corp.’s subsidiary Omnicare Inc. has filed for bankruptcy following a $949 million judgment over claims it improperly dispensed prescription drugs to people in long-term care.
The pharmacy-services provider sought court protection Monday in Texas, listing assets of at least $100 million and liabilities between $1 billion and $10 billion in its Chapter 11 petition. The $949 million civil judgment appears as Omnicare’s largest unsecured debt, though the company is contesting this ruling.
Omnicare has secured $110 million in Chapter 11 financing to fund its operations during bankruptcy proceedings. This financing, combined with ongoing cash generation from operations, "will provide sufficient liquidity for Omnicare to meet its ongoing business obligations during the court-supervised process," according to Bloomberg, citing the company.
The Chapter 11 filing will allow Omnicare time to evaluate options for resolving the judgment and addressing "other financial challenges facing the broader long-term care pharmacy industry." The company indicated it might pursue either a standalone restructuring of its business or sell its operations entirely.
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