Well… both Phoenixus and Vyera filed for Chapter 11 bankruptcy in Delaware federal court early this morning. Phoenixus AG (on an operating basis) had about $7.7 million in sales so far in 2023, and lost over $6.3 million, just so far — as treated by US GAAP accounting. Hilarious. [The WSJ has a piece on this, but I’ve not read it — so if we disagree… trust me not the capitalists’ paper of record. Heh.]

We will have more when the more detailed schedules are filed, but we are not surprised by the picture painted here — of failure, after Martin Shkreli’s lawless sprees. Not surprisingly, the biggest unpaid creditor (at over $2 million) is the fine law firm known as Duane Morris, the company’s (and Martin’s) defense counsel in the FTC case, that saw Martin banned for life. The consolidated group had to pay Martin’s legal bills under an indemnity agreement — but now the group cannot pay, and all insurance is exhausted. So Duane Morris is likely to take a hit here.

To be clear, none of these machinations will allow Martin Shkreli or the companies to escape liability for the $60 some million under the FTC judgment, or the now nearly $6 million Martin personally owes Thomas Koestler. Those debts cannot be discharged in any bankruptcy.

In addition, in the next post (which I won’t get to until tomorrow, as the day job calls!), besides Mr. Abbott, as receiver for Thomas Koestler (at just over 31%), and by far the largest holder of Phoenixus AG (seized from Martin in the federal courts in Manhattan last year), I’ll also line out the names of all remaining holders of equity interests in the company. His family member, named Lenore, owns around 0.28%, and Averill Powers still holds about 0.95%. The care-taker CEO Anne Kirby owns 0.11% and Nancy Retzlaff still holds about 0.03%. None of these are likely to see a even penny of recovery.

For its part, the company DOES expect to be able to pay its unsecured creditors at least something — so there will be more to that story, as well.

Updated: As a matter of corporate house-keeping, the above is all about the parent entity — nominally a Swiss holdco. But as I said at the top, the consolidated group also filed for Vyera (that more cursory filing is imaged in full, here), in the US — but the group seeks to make much of that Vyera filing a sealed proceeding.

There are a few other smaller entities included, Regnum Corp., the public ’34 Act reporting company, SevenScore and Oakrum, for example — but as I say, all these are smaller.

The power, and control, all always flowed downhill, from Phoenixus AG.

Onward. Indeed, it looks like Martin is, in fact, a pauper.

Smile….