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Parent of Schuylerville lab seeks bankruptcy protection

Parent of Schuylerville lab seeks bankruptcy protection

The Boston firm that acquired a Schuylerville drug and alcohol testing laboratory from its bankrupt

The Boston firm that acquired a Schuylerville drug and alcohol testing laboratory from its bankrupt parent company has also rallied behind a bankruptcy court judge amid a dispute with creditors.

MDRecovery last week filed for Chapter 11 protection in U.S. Bankruptcy Court in Boston primarily to regain access to its laboratory in a former Schuylerville high school. A group of creditors allegedly seized the property last August.

With the creditors denying MDR officials access to the premises of Saratoga Labs, the Boston firm sought a court order reestablishing its control over the property. MDR acquired the Schuylerville lab more than a year ago from the defunct DrugRisk Solutions.

MDR received that reestablishment order Thursday — only four days before the state Health Department was scheduled to conduct a proficiency test. The inspection could prove to be crucial to Saratoga Labs’ status as a state-licensed lab and its viability as a business. In July 2006, the lab employed 15.

MDR’s Chapter 11 filing continues a saga that started when DrugRisk also filed for reorganization in U.S. Bankruptcy Court in Albany in March 2006. DrugRisk, an advanced hair follicle drug test technology developer, was also housed in the Schuylerville high school.

DrugRisk underwent liquidation and MDR picked up its subsidiary, Saratoga Labs, a forensic toxicology lab that provides substance abuse testing of hair and urine samples for the Department of Transportation, correctional programs, courts, schools and rehabilitation institutions.

Last July, a group of investors led by Arrow Financial Corp. Director Kenneth Hopper sued MDR President Frederick Marden in state Supreme Court in Warren County, claiming he mismanaged his company and breached his fiduciary duties. A month later, the case was moved to U.S. District Court in Albany.

The investors last year alleged MDR was in default of a series of loans totaling $1.5 million. The alleged default had the investors demanding MDR return certain assets, including a patent, equipment, two bank notes, corporate books and internal accounting documents. U.S. District Court Judge David Homer stayed the civil suit Monday because of the bankruptcy case in Boston.

Hopper was a chairman of DrugRisk and now serves as chief executive officer and chairman of ExCel BioScience, a national toxicology lab. Hopper was also the owner of Saratoga Labs’ predecessor, Northeast Toxicology, a forensic toxicology lab. He owns Adirondack Eye Physicians & Surgeons, a Glens Falls practice and a Saratoga Labs creditor, according to court documents and Securities and Exchange Commission filings.

It is not clear whether the Health Department conducted its scheduled inspection Monday at Saratoga Labs. An agency spokeswoman did not immediately return a call.

Attorneys for MDRecovery and Hopper also did not immediately return calls seeking comment.

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