Court ruling resolves Graceway Pharmaceuticals dispute with ad agency

By Lisa Kerner

Charlotte, N.C., Dec. 30 - Graceway Pharmaceuticals, LLC was granted court approval of a settlement with its advertising agency, resolving a dispute over ownership of Graceway's intellectual property, according to documents filed Friday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the agency, Metaphor, Inc., sought to block the $455 million sale of substantially all of Graceway's assets to Medicis Pharmaceutical Corp., which closed on Dec. 2.

Intellectual property dispute

Metaphor's objection to the inclusion of intellectual property in the sale had been overruled, but Metaphor initiated an adversary proceeding and contemplated an appeal.

The ad agency filed its objection to the sale after its representative resigned from the official committee of unsecured creditors.

Metaphor was seeking to collect $471,000 in unpaid fees that Graceway owed before its bankruptcy case began.

Settlement terms

Under the terms of the settlement agreement, Metaphor will waive all rights of appeal of the sale.

In addition

• Metaphor and the debtors will file a joint stipulation for the dismissal with prejudice of the Metaphor adversary proceeding;

• The debtors will pay Metaphor $25,000 in cash; and

• Metaphor will receive an allowed general non-priority unsecured claim of $398,230.

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.