A pharmacy filed Ch. 7, with its primary asset being $40-50,000 in drug inventory. Upon the motion of the Trustee, the court found that the FDA and NC Pharmacy Board had specific procedures regarding the proper handling and disposal of prescription drugs that those entities were better able to follow than the Trustee. Accordingly, as there were no other assets, dismissal was proper to allow the Pharmacy Board to dispose of the drugs. (This case was subsequently appealed, but that was dismissed with the agreement of the debtor.)
It does not appear that either abandonment of these drugs by the bankruptcy estate pursuant to 11 U.S.C. § 554 or retention of the Pharmacy Board as a professional pursuant to 11 U.S.C. § 327 was considered. The likely administrative burden from handling the medical records and appointment of a patient care ombudsmen under 11 U.S.C. § 333 may also have been factors in seeking dismissal of this case.
This issue, however, is likely to arise elsewhere with increasing frequency in regards to marijuana bankruptcies and a determination of whether and how a Trustee can dispose of assets that are illegal under federal law.
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