CRO Cetero files for bankruptcy protection 8 months after FDA fake document accusations
Documents filed today show Cetero has liabilities of upwards of $100m (€75m) and more than 5,000 creditors to pay. With estimated assets of less than $10m and the after-effects of the US Food and Drug Administration (FDA) accusations still being felt, Cetero has filed for bankruptcy.
The filing comes eight months after the FDA went public with accusations Cetero, which offers Phase I and bioanalytical services, faked documents and manipulated samples at its laboratory in Houston, Texas.
Cetero responded with a strongly worded statement, saying it was “difficult to understand” the steps taken by the FDA. In the following months Cetero succeeded in having the timeframe for studies with data integrity concerns cut but it appears business still suffered.
A list of the 30 largest unsecured claims against Cetero shows it owes a total of more than $1.1m to organisations ranging from World Courier and Fisher Scientific to the US Department of the Treasury. The single biggest claim is the $150,000 Cetero owes to MacKinnon Calderwood Advertising.
One-fifth of the claims relate to unpaid taxes and the rest are trade debts. Many of the trade-related debts are for pharmaceutical equipment or services, others are for energy and building maintenance, but some are more unusual.
The smallest debt on the list of 30 is $10,000 Cetero owes to Classical 96.3 FM, a Toronto-based radio station. As unsecured claimants Classical 96.3 FM and the other 29 on the list come after the banks but before shareholders when assets are split up in bankruptcy cases.
Filing for Chapter 11 allows management at Cetero to continue run day-to-day operations but the court must approve all big business decisions. Cetero is working with law firms, financial advisors, and others to handle the restructuring.
