Graceway Pharmaceuticals files Ch. 11 plan, eyes exclusivity extension

By Caroline Salls

Pittsburgh, Jan. 26 - Graceway Pharmaceuticals, LLC filed its plan of liquidation and related disclosure statement Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

Specifically, the plan calls for liquidation of substantially all of the property of the company's estates.

Treatment of creditors will include:

• Holders of administrative expense claims, priority tax claims and other priority claims will be paid in full in cash;

• Holders of first-lien facility claims will receive a share of any first-lien available cash, Nycomed litigation proceeds and beneficial interests in a liquidating trust, entitling them to further cash and avoidance action and cause of action proceeds;

• Holders of second-lien facility claims will receive liquidating trust interests entitling them to any available cash remaining after payment of first-lien claims;

• Holders of other secured claims will receive either the collateral securing the claims or cash;

• Holders of general unsecured claims will receive a share of other available cash not subject to liens granted under the second-lien facility after other claims have been paid in full; and

• Holders of intercompany claims, old equity and old equity rights will receive no distribution.

In addition, Graceway is seeking an extension of its exclusive periods for filing and soliciting votes on a plan.

Specifically, the company wants to extend its exclusive plan-filing period to May 26 from Jan. 27 and the solicitation period to July 25 from March 27.

The company said it needs time to further negotiate with parties in interest and solicit acceptances of the plan.

Hearings on the disclosure statement and exclusivity extension motion are scheduled for March 1.

Graceway, a Bristol, Tenn.-based pharmaceutical company, filed for bankruptcy on Sept. 29. Its Chapter 11 case number is 11-13036.

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