Defunct opioid maker Insys Therapeutics Inc. faced tough questioning from a bankruptcy judge Wednesday over its plan to bar shareholders from suing anyone involved in the company’s demise, WSJ Pro Bankruptcy reported. “These are parties that are getting no compensation and are being asked to take positive action to not give a release,” Judge Kevin Gross said at a hearing in the U.S. Bankruptcy Court in Wilmington, Del., where he was considering Insys’s chapter 11 liquidation plan. The company filed for chapter 11 bankruptcy in June, after pleading guilty to mail fraud in connection with the sales of the powerful painkiller Subsys. It wants to end its bankruptcy by handing out its remaining cash and shutting down litigation, including lawsuits by shareholders, who are getting nothing. Yesterday, Judge Gross cleared Insys to begin polling creditors on its chapter 11 liquidation plan, which includes a forced ban on lawsuits applied to shareholders, unless they speak up quickly. After the voting, Insys must return to court to seek confirmation of its chapter 11 plan, and Judge Gross will take another look at the shareholder litigation ban, he said.
