Lannett creditors blasts company’s attempt to disband committee

By Sarah Lizee

Olympia, Wash., May 23 – Lannett Co., Inc.’s official committee of unsecured creditors objected to the company’s motion seeking to disband the group, according to documents filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the company said there is no justification for the debtors’ estates to bear the costs of an unsecured creditors committee where all holders of general unsecured claims will be unimpaired by the cases.

However, the committee argued that there is a fundamental fairness concern and important role for the committee to play in the cases that may not have been apparent when they first started.

“Oftentimes what a debtor claims is a ‘pre-pack’ turns out not to be fully ‘packed.’ That is exactly what is going on in these cases,” the committee said in its objection.

“The plan is not fully consensual, proposes to eliminate the multimillion-dollar claims of an entire class of unsecured creditors, and, in the committee’s view, contains impermissible non-consensual releases.”

The group noted that the plan proposes to wipe out an estimated $88.5 million of unsecured noteholder claims.

“Just because the plan was solicited on the eve of the petition date does not mean these cases warrant any quicker timeline than any other case seeking to flush tens of millions of dollars in debt,” the committee added.

On a related note, the committee is asking the court to reconsider the timeline contained in the scheduling order.

Based in Trevose, Pa., Lannett develops, manufactures, packages, markets and distributes generic pharmaceutical products. The company filed bankruptcy on May 2 under Chapter 11 case number 23-10559.

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