Millennium Health LLC, one of the nation’s largest drug-testing laboratories, has filed for chapter 11 protection, a month after agreeing to pay $256 million to settle allegations that it billed the federal government for unnecessary tests, The Wall Street Journal reported yesterday. The San Diego-based company filed for bankruptcy with a lender-backed plan that will slash $1.15 billion in debt off its books. Under the terms of the so-called prepackaged plan, Millennium’s lenders, owed $1.75 billion, will swap their debt for 100 percent of the equity in a reorganized company plus $600 million in new debt. In court papers, CEO William Brock Hardaway said that both the lender and government agreements require the company to exit bankruptcy by Dec. 30. The company’s owners, including private-equity firm TA Associates Management LP and company founder James Slattery, will pay $325 million to pay for the federal settlement and cover working capital costs. Skadden Arps Slate Meagher & Flom LLP is handling the chapter 11 case, and Judge Laurie Selber Silverstein has been assigned the case.
