CARSON, Calif., May 9 Leiner Health Products Inc.("Leiner" or "the Company") announced today that it has submitted a proposedagreement with the United States Department of Justice to the U.S. BankruptcyCourt in Delaware for approval. The proposed agreement would resolve thepreviously disclosed investigation concerning the production, control anddistribution of certain over-the-counter (OTC) drug products at the Company'snow defunct Fort Mill, South Carolina facility. The agreement is subject toapproval and acceptance by the United States District Court in Columbia, SouthCarolina.
This agreement would resolve the government's investigation of allegationsagainst Leiner, which were related to a previously disclosed Form 483 reportthe Company received from the Food and Drug Administration (FDA) on March 16,2007. Both the investigation and the Form 483 pertained to activities thattook place at the now closed Fort Mill facility prior to the arrival of thecurrent Quality Control management team.
"Leiner took immediate action to correct this situation," said Robert K.Reynolds, CEO and President of Leiner. "In addition to the closure of theaffected facility, we also restructured our Quality Control systems, includingtop to bottom personnel changes and implementation of strengthened complianceprograms to ensure that all products conform to Leiner's rigorous standards."
Under the terms of the agreement, Leiner Health Products, LLC, asubsidiary of Leiner Health Products Inc., would enter a plea of guilty to onecount of mail fraud and would forfeit $10 million in cash in lieu of a fine.The agreement in no way implicates or affects Leiner's ability to manufactureand distribute vitamin and mineral products.
Mr. Reynolds continued, "We are pleased to put these issues behind us, andwe are committed to providing consumers with the best value and highest-quality products available in the marketplace."
As previously announced on March 10, 2008, Leiner filed voluntarypetitions for relief under Chapter 11 of the U.S. Bankruptcy Code in Delawarein order to continue its operations and enhance the value of its business. Theproposed agreement requires approval by, and has been submitted to theBankruptcy Court in Delaware.
Additional information on the Chapter 11 process can be obtained from theCompany's website at www.leinerinformation.com or by calling 1-888-264-1304.
About Leiner Health
Founded in 1973 and headquartered in Carson, Calif., Leiner HealthProducts is America's leading manufacturer of store brand vitamins, minerals,and nutritional supplements (VMS), as measured by retail sales, and suppliesthe food, drug, mass merchant and warehouse club (FDMC) retail market. Leinerprovides the leading FDMC retailers with over 2,000 products to help itscustomers create and market high-quality store brands at low prices. It isalso the largest supplier of VMS to the U.S. military. Leiner markets its ownbrand of vitamins under YourLife(R). In 2007, Leiner distributed more than 21billion doses that help offer consumers high quality, affordable choices toimprove their health and wellness.
Jen Brown, Weber Shandwick
SOURCE Leiner Health Products Inc.