K-V Pharmaceutical, senior noteholders agree to Chapter 11 plan terms

By Caroline Salls

Pittsburgh, Dec. 13 - K-V Pharmaceutical Co. has reached an agreement with its senior noteholders on the principal terms of a plan of reorganization, according to a filing with the U.S. Bankruptcy Court for the Southern District of New York.

The plan agreement is subject to compliance with applicable disclosure and solicitation requirements and the company's fiduciary obligations.

Under the proposed plan terms:

• All administrative and priority claims would be paid in full;

• The company's debtor-in-possession facility would be converted to a first-lien exit term loan facility;

• Senior noteholders would receive a share of 82% of the common equity of the reorganized K-V Pharmaceutical, subject to dilution by new common stock issued in connection with a management incentive plan and rights offering, and a $50 million second-lien term loan facility;

• New first-lien lenders would receive 15% of the new common stock, subject to dilution by the management incentive plan and rights offering;

• Convertible noteholders would receive a share of 3% of the new common stock, subject to dilution, and the rights to purchase up to $20 million of new common stock at an exercise price intended to provide the senior noteholders with a recovery equal to par plus accrued interest on their senior secured notes; and

• Holders of general unsecured claims would receive a share of cash in an amount to be agreed upon by the company and new first-lien term loan agent.

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

© 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.