Pfizer's bankrupt Quigley unit can't reorganize as planned because the drugmaker orchestrated the bankruptcy to shield itself from asbestos liability, the US government said.
Lawyers for the U.S. Trustee, an arm of the Justice Department overseeing bankruptcy, objected to Quigley's reorganization plan in court documents filed Sept. 4. The lawyers said Pfizer made a joint-defense agreement with Quigley in September 2003, a year before the bankruptcy, and failed to disclose it in the proposal.
The plan doesn't meet the bankruptcy law's requirement for ``good faith,'' or loyalty to creditors without self-dealing, because of Pfizer and Quigley's relationship, the lawyers said. They plan to ask the bankruptcy court to appoint an examiner to investigate the tie.
``Pfizer orchestrated Quigley's bankruptcy filing in order to obtain the benefits of an automatic stay and the channeling injunctions provisions of the Bankruptcy Code,'' said the lawyers for acting trustee Diana Adams. Under an automatic stay, parties in bankruptcy are protected from lawsuits as they reorganize.
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