Insys Therapeutics founder John Kapoor, center, departs federal court in Boston on Jan. 30, 2019. (AP Photo/Steven Senne)Law Firms Dominate Opioid Maker's Creditors as Weil Takes Counsel Role for Insys
Weil Gotshal is representing opiate manufacturer Insys, whose bankruptcy petition lists nearly $20 million in unsecured claims from 22 law firms.
June 12, 2019 at 03:15 PM
4 minute read
UPDATE, Thursday, June 13: A representative for Wilkinson Walsh + Eskovitz said in a statement Thursday that the firm had been incorrectly listed as an unsecured creditor of Insys Therapeutics in the company's June 10 Chapter 11 petition, and that it is not a creditor or participant in the bankruptcy. The original filing, the representative said, “incorrectly lists Wilkinson Walsh + Eskovitz LLP as a creditor on an indemnification claim stemming from our representation of Dr. John Kapoor. As we informed Insys's counsel, the correct creditor for the indemnification claim is Dr. Kapoor, since he timely and personally paid all portions of our fees that Insys has failed to indemnify to date.”
Efforts by ALM to reach Insys's counsel at Weil, Gotshal & Manges on Thursday afternoon were unsuccessful, and the court docket had not been updated to reflect any changes to the unsecured creditor list that was filed on Monday. Our original report appears below.
Wilkinson Walsh + Eskovitz, King & Spalding and Nixon Peabody are among a long list of law firms named as creditors by Insys Therapeutics, the first drug company to seek bankruptcy protection over liabilities tied to its opioid sales.
Insys, a Chandler, Arizona-headquartered pharmaceutical company that is best known for a spray version of fentanyl, an opioid medication, filed for Chapter 11 bankruptcy Monday, tapping a team from Weil, Gotshal & Manges led by restructuring practice co-chairman Gary Holtzer, along with Delaware counsel at Richards, Layton & Finger led by Mark Collins.
The Delaware filing came more than a week after a federal jury convicted Insys' founder and four members of its leadership team of a racketeering conspiracy centered on bribing doctors to prescribe the highly addictive painkiller to cancer patients.
For a company that claims its fentanyl product Subsys represented just a tiny slice of the opioid market—0.0283% of opioid prescriptions at its height in 2015—Insys has created an outsized share of legal work tied to the opioid crisis.
In addition to the federal criminal convictions of its founders and former leadership, multiple attorneys general have taken Insys and other pharmaceutical companies to court in efforts to hold the drugmakers responsible for the opioid epidemic. Patients prescribed the drug who have become addicted have also sued Insys.
In the federal kickbacks prosecution, Wilkinson Walsh's Beth Wilkinson represented convicted Insys founder John Kapoor, along with lawyers at Nixon Peabody, Ropes & Gray, Paul, Weiss, Rifkind, Wharton & Garrison and Nardello & Co. Creditors who provided services to Kapoor said they are owed a combined $11.65 million.
King & Spalding and Hogan Lovells represented former Insys CEO Michael Babich, and the firms have unsecured claims in the bankruptcy of a combined $2.5 million. Quinn Emanuel Urquhart & Sullivan has a claim for $282,000 related to its representation of former chairman Steven Meyer and board member Pierre Lapalme. A Boston firm, Miner Orkand Siddall, said it is owed more than $380,000 for providing counsel to Mike Gurry, a former Insys vice president. Katten Muchin Rosenman and Patterson Belknap Webb & Tyler also have claims related to representing an Insys manager and board member, respectively.
Of the company's 30 largest unsecured creditors, more than two-thirds are law firms, and most are Am Law 100 firms. Four of the firms have listed claims of more than $1 million: Wilkinson Walsh is listed with a claim of more than $8 million; King & Spalding claims $2 million; and Nixon Peabody and White & Case each show claims of more than $1 million.
In total, 22 firms have unsecured claims ranging from $8.9 million to $110,000:
- Wilkinson Walsh + Eskovitz
- King & Spalding
- Nixon Peabody
- White & Case
- Cravath, Swaine & Moore
- Paul Hastings
- Ropes & Gray
- Paul, Weiss, Rifkind, Wharton & Garrison
- DLA Piper
- Holland & Knight
- Miner Orkand Siddall
- Carlton Fields
- Hogan Lovells
- Nardello & Co.
- Quinn Emanuel Urquhart & Sullivan
- Skadden, Arps, Slate, Meagher & Flom
- Katten Muchin Rosenman
- Shook, Hardy & Bacon
- Covington & Burling
- K&L Gates
- Patterson Belknap Webb & Tyler
- Marino, Tortorella & Boyle
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