Chem Rx Trustee Blames Bankruptcy On $162M LBO

Law360, New York (May 10, 2012, 8:07 PM EDT) -- The trustee for bankrupt pharmacy Chem Rx Corp. on Wednesday sued board members of Paramount Acquisition Corp., the shell company that took it over in 2007, claiming they forced a risky $162 million leveraged buyout to protect their personal holdings.

CRC Litigation Trust said the takeover by Paramount, an acquisition vehicle backed by biotech mogul Lindsay Rosenwald, saddled the company with debt and ultimately led to its collapse two and a half years later.

Paramount's directors, including Rosenwald, were under a deadline to acquire and merge...
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