Endo committee, noteholders want more time to discuss sale alternative

By Sarah Lizee

Olympia, Wash., Dec. 6 – Endo International plc’s official committee of unsecured creditors and an informal group of noteholders have asked the U.S. Bankruptcy Court for the Southern District of New York to move a hearing to consider the debtor’s proposed sale process, according to court documents.

The committee said adjournment of the Dec. 15 hearing would allow the parties to engage in discussions and explore whether there is a Chapter 11 plan alternative to the sale.

As previously reported, the company is currently seeking approval of a sale process that has first-lien debtholders as a stalking horse bidder for its assets.

“To our knowledge, all major creditor groups – excluding, of course, the first-lien creditors who stand to benefit from the proposed sale – wish to engage in such discussions to try to reach a global settlement of all issues,” the informal noteholder group said in a letter filed Monday.

The group said that if the effort is successful, the debtors’ concerns about “substantial litigation” related to plan issues would be moot.

“Conversely, if the debtors fail to put forth a value-maximizing plan, litigation is inevitable,” the group said.

Proposed sale process terms

The stalking horse bidder, an entity formed by the first-lien debtholders, has agreed to credit bid the full amount of the $5.9 billion of prepetition first-lien debt; offer employment to all of the debtors’ employees on their current terms; assume and cure a significant number of trade contracts; establish voluntary trusts funded with up to $550 million over time, which will be disbursed to eligible opioid claimants who elect to participate in such trusts; provide at least $122 million in cash to wind down the debtors’ operations following the sale; and fund pre-closing professional fees.

Further, there is a four-month formal marketing period where Endo will allow them to attract a higher or otherwise better bid.

The debtors suggest this path after extensive consideration and careful study, as an alternative to a plan of reorganization.

Competing bids should be for substantially all of Endo’s assets or one or more of the following: one or more of the debtors’ business segments (including or excluding the collagenase clostridium histolyticum assets and/or the legacy opioid assets); all of the collagenase clostridium histolyticum assets; and/or all of the legacy opioid assets.

In order to facilitate the stalking horse agreement and any other successful bid, the debtors are also seeking authorization to undertake certain preliminary structuring steps that will streamline an ultimate sale in a tax efficient manner, thereby helping to maximize value received from the sale.

Notably, there is no break-up fee. There are however expense reimbursements for the stalking horse bidder.

The indication of interest deadline is Feb. 21.

Qualified bids are due by April 18. An auction will be held on April 27.

The suggested sale hearing date would be May 3.

As reported, the U.S. trustee overseeing the case has filed an objection to the proposed sale process.

Endo is a Dublin, Ireland-based specialty pharmaceutical company that filed bankruptcy on Aug. 16. The Chapter 11 case number is 22-22549.

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