Graceway Pharmaceutical's $455 million sale to Medicis OK'd by court

By Jim Witters

Wilmington, Del., Nov. 22 - The $455 million sale of Graceway Pharmaceuticals, LLC's assets to Medicis Pharmaceutical Corp. won court approval Tuesday over the objection of an advertising firm that claimed ownership of Graceway's intellectual property.

Metaphor, Inc. claimed ownership of all of Graceway's logos, packaging, trademarks and other intellectual property developed by Metaphor.

The firm filed its objection to the sale after Metaphor's representative resigned from the official committee of unsecured creditors. Metaphor was seeking to collect $471,000 in unpaid fees Graceway owed before its bankruptcy case began.

Metaphor claimed that since its employees created the logos and other intellectual property and because Metaphor had no work-for-hire agreement with Graceway and never conveyed its copyright to Graceway, Metaphor owned it all.

Judge Peter J. Walsh overruled the claim.

The sale is expected to close about Dec. 1.

The debtors resolved an objection from the official committee of unsecured creditors by setting aside $10 million free and clear of claims by the first-lien lenders to disburse to U.S. creditors.

Sun Pharma Global was the backup bidder with a cash bid of $452.5 million.

Graceway, a Bristol, Tenn.-based pharmaceutical company, filed for bankruptcy on Sept. 29 in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 case number is 11-13036.

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