CVS division enters Chapter 11 liquidation sale | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

While its core business has been strong, CVS has a billion-dollar problem in one of its divisions.

CEO David Joyner talked about the health of the overall company in his opening remarks as part of its fourth-quarter earnings call.

“For full year 2025, we delivered adjusted earnings per share of $6.75 and operating cash flow of $10.6 billion, exceeding our initial expectations coming into the year for adjusted EPS by approximately 15% and meaningfully outperforming our expectations on cash flow. We still have an incredible amount of earnings power to unlock across our diversified business, but our progress to date has been impressive,” he said.

CFO Brian Newman was also bullish in sharing the healthcare company’s guidance for next year.

“We are reaffirming our guidance for full year 2026 revenue of at least $400 billion, as well as our expectation for full year 2026 adjusted EPS in a range of $7 to $7.20,” he said during the Q4 call.

What neither mentioned during the call is the ongoing Chapter 11 process for the company’s Omnicare division, which delivers medications in bulk to care facilities, packages drugs for scheduled dosing (daily pill packs, etc.), and provides pharmacist consulting to staff and physicians.

By not highlighting Omnicare, CVS appears to be signaling the issue is contained and moving toward resolution, not expected to impact its broader business.

CVS Omnicare, which serves nursing homes, assisted living centers, and long-term care and rehab facilities, filed for Chapter 11 bankruptcy in Sept. 2025, according to documents found on PacerMonitor.

Now, the company, which CVS has owned since 2015, will be subject to a court-ordered bankruptcy sale in May.

CVS Omnicare lost a major lawsuit

CVS Health’s Omnicare unit was given a nearly $1 billion ( $948.8 million) judgment in penalties and damages by a federal judge in a whistleblower lawsuit claiming it fraudulently billed the U.S. government for invalid drug prescriptions.

“U.S. District Judge Colleen McMahon in Manhattan imposed a $542-million penalty for filing 3,342,032 false claims between 2010 and 2018. McMahon also awarded $406.8 million of damages, representing three times the $135.6 million that a jury awarded on April 29,” Reuters reported.

U.S. Attorney for the Southern District of New York Jay Clayton, who brought the case against CVS Omnicare, celebrated his victory in a press release.

“False claims in the healthcare industry cost every American. Today, a unanimous jury found Omnicare, the country’s largest long-term care pharmacy, liable for fraudulently dispensing drugs without valid prescriptions to elderly and disabled people in assisted living facilities and other residential long-term care facilities,” he said.

He also took a shot at CVS Health.

The jury also found CVS Health Corporation, Omnicare’s parent, liable for causing Omnicare to submit false claims. I thank the women and men of our Civil Division for continuing to pursue those who seek to exploit the healthcare system,” he said.

CVS followed the verdict with a bankruptcy filing

Omnicare, LLC, a subsidiary of CVS Health (NYSE: CVS ), filed a voluntary court-supervised Chapter 11 bankruptcy petition on Sept. 22, 2025, “to resolve issues related to its recent litigation in the U.S. District Court for the Southern District of New York,” it shared in a press release.

At the time, the company mentioned that a sale was one potential outcome. Omnicare President David Azzolina explained his view of the lawsuit.

“Omnicare has been engaged in a civil lawsuit alleging technical violations of pharmacy law based on practices the government knew about and approved. There were no allegations of harm to any Omnicare patients nor did the government allege that any patient got anything other than the medicine they needed when they needed it,” he said.

Azzolina also made it clear that he thought the penalty did not fit what actually happened.

More bankruptcy:

“The District Court nevertheless imposed an extreme and, we believe, unconstitutional penalty,” he added.

CVS Health, it should be noted, has owned Omnicare since 2015, but none of its other divisions, which include its CVS pharmacies and its AETNA health insurance brand, are directly impacted by the Chapter 11 filing.

CVS Omnicare serves assisted living and other similar facilities.

Shutterstock

CVS Omnicare will be sold

“CVS Omnicare appears headed for a court-supervised bankruptcy sale months after it filed for Chapter 11 protection,” Providence Business First reported.

A stalking-horse offer is on the table, with GenieRx Holdings LLC proposing to pay $250 million in cash for Omnicare, a company that Rhode Island-based CVS Health Corp. bought in 2015 for about $12.7 billion, the business journal added.

GenieRX became the stalking horse bidder after entering into an agreement with CVS.

“The agreement with GenieRx will set the floor for the sale of the company’s assets. Accordingly, the proposed agreement is subject to higher or otherwise better offers from other qualified bidders,” the company shared in a press release.

The deadline for interested parties to submit competing bids is April 30, 2026. If qualified bids are received, an auction is expected to be held on May 5, 2026.

A hearing to approve the sale to the winning bidder will be scheduled shortly thereafter, subject to the availability of the court.

The sale effectively limits Omnicare’s financial exposure to its own proceedings, reducing the likelihood of a broader impact on CVS’s retail and insurance segments.