Creditors of failed Aussie drug company meet

  • Business
  • Monday, 01 Sep 2003

SYDNEY, Australia (AP) - Creditors met Monday to decide the future of Australia's largest nonprescription drug company, which declared bankruptcy after a massive recall of its products. 

Pan Pharmaceuticals was ordered to halt operations for six months in April and recall 668 of its products after the government alleged the company manipulated laboratory results and used raw materials not tested for safety. 

It was the largest medical product recall in Australia's history, prompting the resignation of founder and chief executive Jim Selim and forcing the company to seek protection from its creditors. 

The company accounted for 70 percent of Australia's herbal vitamins and nutritional supplements, and exported to dozens of countries. 

It also made medicines such as paracetamol, codeine and antihistamines. 

About 200 employees and trade creditors met in Sydney on Monday.  

They will vote on whether to keep the company going or liquidate it. 

Tony McGrath, who is currently the company's administrator, told creditors they have three choices: "That the company be returned to its directors, that the company consider a deed of arrangement, or that the company proceed into liquidation.'' 

Selim and investor Fred Bart have proposed an arrangement under which Pan would acquire a new board and retain its 128 staff. 

McGrath has recommended that the creditors liquidate Pan and cut their losses. - AP 

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