Savient Pharmaceuticals amended plan of liquidation confirmed by court

By Kali Hays

New York, May 19 - Savient Pharmaceuticals, Inc. received confirmation of its first amended Chapter 11 plan of liquidation, according to a Monday order with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the company's disclosure statement was approved March 18, and a settlement with its official committee of unsecured creditors and unofficial committee of senior secured noteholders was approved in February.

Under the approved settlement:

• The collateral agent will carve out some sale proceeds to general unsecured creditor trust accounts, including $2.52 million in cash to be held for the benefit of general unsecured creditors and professionals and $100,000 in cash for a convertible notes trustee payment;

• Savient will transfer to the trust accounts 100% of proceeds of accounts receivable related to CVS Caremark Corp. litigation;

• Under the confirmed plan or alternative trust structure, specified claims and causes of action and related proceeds will be transferred to a liquidating trust;

• If Savient's plan does not take effect by June 30, the parties will create an unsecured creditor vehicle to facilitate the distribution of general unsecured creditor assets to those creditors;

• After payment of all administrative and priority claims, all of the company's cash or other assets will be distributed to the pre-bankruptcy secured parties until their pre-bankruptcy obligations and adequate protection obligations are paid in full; and

• The pre-bankruptcy secured parties will not receive any payment from general unsecured creditor assets on account of their deficiency claim.

Under the plan, treatment of creditors will include the following:

• Administrative claims, priority tax claims and priority non-tax claims will be paid in full in cash;

• Holders of miscellaneous secured claims will either be paid in full in cash or receive the collateral securing the claims;

• Holders of senior secured noteholder claims will receive a share of final cash sweep proceeds, any professional fee reserve cash and administrative claim reserve cash returned by the liquidating trustee to the notes trustee and the net proceeds of remaining assets if and when they are liquidated by the notes trustee;

• Holders of general unsecured claims will receive a share of liquidating trust interests. Distributions on account of trust interests will be made after trust expenses are paid or reserved; and

• Holders of intercompany claims, subordinated 510(b) claims, subordinated 510(c) claims and interests will receive no distribution.

Savient, an East Brunswick, N.J., pharmaceutical company, filed for bankruptcy on Oct. 15, 2013 in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 case number is 13-12680.

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