Leiner Health Products is considering the sale of its US business after filing for Chapter 11 bankruptcy protection and receiving $74 million in financing to continue operating, according to a statement by the private-label manufacturer. For now, the cash infusion will help cover operations and fulfill shipments.

“Although we have already taken many steps to address the challenges that arose following our March 2007 decision to voluntarily suspend OTC operations by streamlining our operations and manufacturing footprint, these actions were not enough to offset the cost of our substantial debt obligations,” Rob Reynolds, Leiner’s ceo and president, says in the statement.

Leiner supplies OTC, store-brand drugs and vitamins to several of the nation’s biggest retailers, including Wal-Mart, Target, CVS, Walgreens and Costco, but a nationwide recall took of OTC products took place last April after the FDA found discrepancies in good manufacturing practices at its Fort Mill, SC. plant. The manufacturer was subsequently accused of falsifying and manipulating test results at that facility. However, the firm continued to manufacture dietary supplements and vitamins at two facilities in Garden Grove and Valencia, Calif.

In October 2007, FDA granted Leiner permission to reenter the market distributing previously manufactured OTC products on the condition the products were approved by an FDA-approved third party. However in February this year, Leiner closed its Wilson, N.C., facility to reduce costs and it would outsource its OTC supply commitments through contracts, The Tan Sheet reports.