uBiome Estate Donating 40k Covid-19 Testing Kits to Hospital

March 26, 2020 | By Alex Wolf | Bloomberg Law

The Children's Hospital of Philadelphia will receive 40,000 swab testing kits able to detect the new coronavirus in patients, thanks to a defunct medical testing company being liquidated in Delaware bankruptcy court.

Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court for the District of Delaware authorized the donation in an expedited order issued Wednesday. The Chapter 7 trustee for fecal testing company uBiome Inc. said the hospital confirmed that the unused kits could effectively test for Covid-19, the disease caused by the virus.

Covid-19 tests are in short supply as health-care workers across the country work to treat patients sickened by the virus. The order allows uBiome to skip an eight-business-day objection period to offload the kits.

Trustee Alfred T. Giuliano of Giuliano, Miller & Co. LLC told the court that authorizing the abandonment and donation of the kits would be useful in fighting the virus's spread "during a national health emergency and would be in the best interest of the public." The Justice Department and uBiome's secured lender Silicon Valley Bank had no objections, he said.

The relief allows the trustee to use the bankruptcy process "for the greater social good of donating medical supplies, rather than selling them for what would have been limited value that would have gone to pay uBiome's lenders," trustee attorney Brad Sandler of Pachulski Stang Ziehl & Jones LLP said in a statement.

San Francisco-based uBiome filed Chapter 11 in September 2019 after the FBI began investigating allegedly fraudulent billing practices. The company sold products that allowed consumers and patients to analyze the DNA of their own microbiomes.

Giuliano was appointed trustee when the company converted the case to a Chapter 7 liquidation in October 2019 after failing to obtain the financing necessary to continue operating.

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