Leiner Files Chapter 11

Leiner Files Chapter 11

CARSON, Calif.--On March 1, Leiner Health Products Inc. filed a Chapter 11 petition in the U.S. Bankruptcy Court, an action supported by both its bank lenders and senior subordinatednoteholders. Leiner (www.leiner.com) expects to emerge from Chapter 11 within 45 to 60 days.

This action is in line with Leiner's plans to "re-engineer" the company, part of an effort that began in July 2000. The company has continued to see net losses, including its most recent loss of $11.1 million for its third quarter of fiscal 2002, reported Feb. 15.

Prior to filing Chapter 11, Leiner negotiated a prepackaged plan of reorganization with its bank lenders and noteholders, which was supported almost unanimously. By filing Chapter 11, the company obtains court approval for the prepackaged plan and binds all creditors to the plan--whether they did not vote for or voted to reject the plan.

"Thanks to the continuing support from our bondholders and bank lenders, Leiner is able to implement one of the final pieces of its restructuring plan," stated Robert Kaminski, chief executive officer. "We expect to emerge from this process strengthened with a more appropriate capital structure and re-engineered business well-positioned to build on our industry leading track record of quality and service."

During this time, vendors will continue to be paid in the normal course of business. Leiner reported that it also plans to continue to pay employee salaries, wages and benefits without interruption, as well as to continue to serve customers.

Leiner's Canadian business, Vita Health, is not filing for bankruptcy and will continue business as usual.