FoxMeyer Health's Bankruptcy Filing Causes Disputes

- The filing for bankruptcy by US firm FoxMeyer Health has resulted in a number of pharmaceutical companies entering into disputes with Wall Street Securities firms, according to a report in the Wall Street Journal. The disputes arise from trade claims based on money that is owed by FoxMeyer to its vendors, the pharmceutical companies.

Trade claims are different to other types of corporate debt that are traded. For instance, they are not securities and cannot be traded quickly. Sometimes it can take weeks for a transaction to close, in which time the price can fall. This has happened with FoxMeyer and drug companies such as Merck & Co, Glaxo Wellcome and Eli Lilly, which are now trying to ensure that the deals go through as planned.

Traders told the WSJ that there are at least four large claims that have broken down and that there are renegotiations going on to settle who will take on the possible losses of around $20 million.