[Federal Register Volume 63, Number 208 (Wednesday, October 28, 1998)] [Notices] [Pages 57708-57709] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 98-28897] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF JUSTICE Drug Enforcement Administration [Docket No. 97-16] Penick Corporation, Newark, New Jersey; Notice of Administrative Hearing, Summary of Comments and Objections; Notice of Hearing This Notice of Administrative Hearing, Summary of Comments and Objections, regarding the application of Penick Corporation (Penick) for registration as an importer of coca leaves, raw opium, opium poppy and poppy straw concentrate, all Schedule II controlled substances, is published pursuant to 21 CFR 1301.42(a). On May 12, 1997, notice was published in the Federal Register \1\ stating that Penick has applied to be registered as an importer of coca leaves, raw opium, opium poppy and poppy straw concentrate. --------------------------------------------------------------------------- \1\ 62 FR 25972. --------------------------------------------------------------------------- On June 12, 1997, Noramco of Delaware, Inc. (Noramco), filed comments and objections on the application and requested a hearing in the event that the application is not denied. Mallinckrodt Chemical, Inc. (Mallinckrodt), also filed comments and objections to the application. Notice is hereby given that a hearing with respect to Penick's application to be registered as an importer of coca leaves, raw opium, opium poppy and poppy straw concentrate will be conducted pursuant to the provisions of 5 U.S.C. 952(a) and 958 and 21 CFR 1311.42. Hearing Date: The hearing will begin at 9:30 a.m. on November 30, 1998, and will be held at the Drug Enforcement Administration Headquarters, 600 Army Navy Drive, Hearing Room, Room E-2103, Arlington, Virginia. Notice of Appearance: Any person entitled to participate in this hearing pursuant to 21 CFR 1301.42(a), and desiring to do so, may participate by filing a notice of intention to participate in accordance with 21 CFR 1301.54, in triplicate, with the Hearing Clerk, Office of the Administrative Law Judges, Drug Enforcement Administration, Washington, D.C. 20537, within 30 days of the date of publication of this notice in the Federal Register. Each notice of appearance must be in the form prescribed in 21 CFR 1216.48. Penick, Noramco, Mallinckrodt, and DEA Office of Chief Counsel need not file a notice of intention to participate. For Further Information Contact: Helen Farmer, Hearing Clerk, Drug Enforcement Administration, Washington, D.C. 20537; Telephone (202) 307-8188. Summary of Comments and Objections Mallinckrodt's Comments Mallinckrodt states that as a result of Penick's financial difficulties, which led to Penick's Chapter 11 bankruptcy petition, Penick has not produced significant quantities of controlled substances since 1991 and does not have the present ability to do so. Mallinckrodt further asserts that Penick's bankruptcy trustee, appointed by the bankruptcy court, has no experience in the controlled substance business, and that the goal of Penick and its bankruptcy trustee has not been to ressurect the business, but rather, to sell the business in order to pay off Penick's creditors. Mallinckrodt asserts that Penick has previously stated that it views its DEA registrations as its most valuable assets. Mallinckrodt argues that because DEA has a policy of not granting ``shelf registrations,'' i.e., registrations that the applicant intends to use only in the future, Penick should not be granting a DEA registration because ``[a]llowing Penick to treat its DEA registrations as assets is not the proper use of [a] DEA registration or the DEA registration process.'' Noramco's Comments Noramco argues that Penick cannot meet the burden of demonstrating that its registration is in the public interest due to a combination of its financial status and its management by a court-appointed bankruptcy trustee. Noramco first argues that Penick has substantial financial difficulties, which has resulted in Penick producing only small amounts of controlled substances since 1991 and that also caused Penick, in June 1994, to file for bankruptcy under Chapter 11 of the Bankruptcy Code. Normaco states that the management of Penick is now controlled by a bankruptcy trustee who does not have experience in the controlled substances industry. Moreover, Noramco asserts that the trustee's primary function is to market Penick's assets, with Penick's DEA registrations being the corporation's most significant assets. Noramco claims that the bankruptcy trustee's desire to make the sale of Penick more lucrative is not a lawful purpose for registration under the Controlled Substances Act. [[Page 57709]] Finally, Noramco has expressed concern that Penick's poor financial situation and management may increase the risk of diversion of any controlled substances that it imports. The Government's Comments The Government asserts that the above-captioned proceeding is a combination of a rulemaking to determine whether the Schedule II raw materials coca leaves, raw opium, poppy straw, and poppy straw concentrate may be imported lawfully into the United States pursuant to 21 U.S.C. 952(a)(1) and also an adjudication pursuant to 21 U.S.C. 958(a) on Penick's pending application for a DEA registration as an importer of Schedule II raw materials. The Government argues that because DEA does not maintain a ``contingency reserve'' of DEA registrants Penick must first demonstrate that raw opium and poppy straw concentrate may be imported into the United States pursuant to 21 U.S.C. 952(a)(1). The Government further asserts that Penick, which is involved in Chapter 11 bankruptcy proceedings, must next demonstrate to the Deputy Administrator that it is able to satisfy the requirements of 21 U.S.C. 823(a) and 958(a) and 21 CFR 1301.34(b)-(f) before the Deputy Administrator will renew its DEA registration to import the above- listed Schedule II raw materials into the United States. The Government also requests that all interested parties be afforded the opportunity to provide comments for such rulemaking. Due to the length of time between the notice of Penick's application for renewal of its DEA registration, see 62 FR 25972 (1997), and this Notice of Hearing, the Government's request is granted. All interested parties shall have until November 30, 1998, to file comments regarding the above-mentioned rulemaking. Dated: October 22, 1998. Donnie R. Marshall, Acting Deputy Administrator, Drug Enforcement Administration. [FR Doc. 98-28897 Filed 10-27-98; 8:45 am] BILLING CODE 4410-09-M