K-V Pharmaceutical creditor Hologic objects to exclusivity extension

By Caroline Salls

Pittsburgh, Nov. 7 - K-V Pharmaceutical Co. creditor Hologic, Inc. objected to the company's proposed extension of its exclusive periods for filing and soliciting votes on a plan of reorganization, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Hologic said there has been no meaningful progress in K-V's Chapter 11 cases.

"The debtors' only strategy in these cases is to cause Hologic to incur so much delay and cost so as to discount its senior secured claim enough to free up cash for administrative expenses," the objection said.

"This is not the proper use of an exclusive period."

In addition, the creditor said, "the debtors are simply not financially viable as a pharmaceutical company with at most two commercial products, even if they had no debt."

As a result, Hologic said the sale of its Makena product is inevitable, and "the only question is how much more cash will be spent to fund losses and administrative expenses before that sale occurs."

Hologic said accruing professional fees are approaching the level of K-V's gross revenues, rendering the cases administratively insolvent.

Hologic said it has no interest in re-acquiring Makena and also prefers not to incur the expense of a fair and open sale of Makena "to avoid further waste of the estate's diminishing cash and further exhaustion of the shrinking orphan drug window."

However, because no meaningful progress has been made, the creditor said it believes the door should be open to all other parties to propose a plan.

A hearing is scheduled for Nov. 16.

K-V Pharmaceutical, a St. Louis-based specialty pharmaceutical company, filed for bankruptcy on Aug. 4. Its Chapter 11 case number is 12-13346.

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