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Medly committee says Walgreen and CVS bids should be qualified
By Sarah Lizee
Olympia, Wash., Feb. 3 – Medly Health Inc.’s official committee of unsecured creditors filed a motion to compel the debtors to qualify bids of CVS Pharmacy Inc. and Walgreen Co. for some of its assets, according to documents filed with the U.S. Bankruptcy Court for the District of Delaware.
The committee said it is concerned that the debtors may determine that the bids submitted by CVS and Walgreen aren’t qualified bids under a “hyper-technical reading” of the bid procedures.
As previously reported, the company has an $18.5 million stalking horse bid from an affiliate of prepetition and debtor-in-possession lender TriplePoint Venture Growth BDC Corp. for its Pharmaca business line.
Both Walgreen and CVS’ bids differ from the stalking horse bid and from each other in terms of purchase price, the type of assets to be purchased and the assumed liabilities.
As such, the bids require more than a simple comparison, the committee said.
Specifically, the bid submitted by Walgreen anticipates that the debtors would receive a purchase price of $20.4 million, and the bid submitted by CVS contemplates $17.6 million. But both exclude some assets, which would be reserved for the debtors’ estates and made available to other buyers.
Additional offers on partial assets have been received by other entities, which include some of the assets excluded in the Walgreen and CVS bids.
“In the committee’s view, the bids submitted by both CVS and Walgreen satisfy all material bid requirements and should constitute qualified bids,” the group said in its motion.
The auction was set to take place on Feb. 3. The sale hearing is scheduled for Feb. 7.
The Boulder, Colo.-based pharmacy company filed Chapter 11 bankruptcy on Dec. 9 under case number 22-11257.
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