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A research company liquidating in Chapter 11 in Kansas had possession of biomedical research performed for our client and for others. Each company commissioning the research had spent millions for its individual research and was potentially subject to massive FDA fines and criminal penalties if the research records couldn’t be preserved and produced. Loss of these records would also render unusable many millions of dollars of additional research by our client. The research records were commingled and could not be separately repossessed. The Chapter 11 Trustee tried to sell us the records for which our client had already paid to have created and threatened to destroy the records if not paid.


M+M filed an adversary proceeding seeking to recover $15 million actual and punitive damages against the Chapter 11 trustee personally for conversion of our client’s intellectual property. After a struggle, both the Trustee and secured creditor bank capitulated. We formulated, negotiated and confirmed a Chapter 11 plan with the other major pharmaceutical corporations which also had their data at risk. Under a Chapter 11 Plan for nominal consideration, the Facility Documents were sold free and clear of liens and claims to a jointly owned LLC with independent management acting under confidentiality agreements with each member, meeting each client’s regulatory requirements to maintain these documents but avoiding the burden of possessing confidential data of other entities, avoiding potential problems of how to respond to regulatory subpoenas and sharing the costs of the document maintenance. Opt outs who chose not to become LLC members were barred from any further claim of right to possession, or access to, the documents or the underlying research data.