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Exaeris, Inyx USA creditor objects to DIP facility amid fraud allegations
By Caroline Salls
Pittsburgh, July 10 - Exaeris, Inc. and Inyx USA, Ltd. creditor Westernbank Puerto Rico objected to the company's proposed debtor-in-possession financing, alleging that Inyx USA's management committed fraud against Westernbank and the DIP funding actually belongs to the creditor, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.
Westernbank said its evidence of fraudulent activity includes inducing Westernbank to advance funds to the company's affiliates in connection with allegedly false and fraudulent invoices transmitted to customers, including using multiple invoices for transactions that could have been one single invoice.
Westernbank said these fraudulent actions resulted in the November 2006 disappearance of $37.7 million in fraudulently created invoices and corresponding receivables and in the June 2007 disappearance of $87.7 million in fraudulent invoices/receivables.
In addition, Westernbank said Inyx USA diverted at least $14 million in cash receipts from customers.
Westernbank said these actions resulted in Inyx Pharma Ltd. and Ashton Pharmaceuticals Ltd. being placed in administration in the United Kingdom and in Exaeris' and Inyx USA's Chapter 11 filings.
"Based on this evidence of fraud by the affiliates, Westernbank has strong cause to believe that any funds to be provided the debtors by [DIP lender Jack] Kachkar or any of his affiliates is actually the property of Westernbank," Westernbank said in the objection.
Inyx, Inc. is pharmaceutical company based in New York that develops drug delivery technologies and products for the treatment of respiratory, allergy, dermatological, topical and cardiovascular conditions. The U.S. subsidiaries - Exaeris Inc. and Inyx USA Ltd. - were placed in Chapter 11 bankruptcy on July 2 by their parent company, and their case number is 07-10887.
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