Contract Research Solutions Inc., a Cary, North Carolina research company who conducts clinical trials for pharmaceutical companies, also known as Cetero Research, filed for Chapter 11 bankruptcy protection following an investigation from the FDA.
In July of 2011, the FDA notified major drug companies, who relied on Cetero to conduct early phase trials for new drug development that they may have to pay for new research after discovering that the research company faked documents at their Houston lab. The FDA also added they did not believe that the false documents created a safety hazard, but indicated that the lab generated corrupted research data.
The FDA ordered that all research done by Cetero would have to be done again, causing a liquidity crisis for the company. Contract Research retained a bankruptcy attorney and has made arrangements to sell a number of assets through a “stalking horse” bid and has secured a $15 million credit line to help them through restructuring.
Through a Chapter 11 bankruptcy, a troubled company can work on paying creditors while it works to restructure the business. A bankruptcy lawyer will be able to look into a company’s finances and decide if they can continue to operate while also paying down debt.
A business or individual who is struggling to stay above water should contact a bankruptcy attorney to give them advice and determine if bankruptcy will help them eliminate some of the burdensome debt.