Synergy Pharmaceuticals settlement calls for Chapter 11 plan changes

By Caroline Salls

Pittsburgh, March 29 – Synergy Pharmaceuticals, Inc. requested court approval of a Chapter 11 plan settlement reached with CRG Servicing LLC, the creditors and equity committees for Synergy’s bankruptcy case and Houlihan Lokey Capital, Inc., according to a motion filed Friday with the U.S. Bankruptcy Court for the Southern District of New York.

Synergy said the settlement covers all actual and potential objections of the equity committee to the plan, an enforcement motion and related appeals and underlying objections to a pre-payment premium, back-end fee and make-whole settlement order.

If approved, the company said the settlement would allow it to seek confirmation of the plan on a “largely consensual basis.”

Under the settlement, the plan will be amended to provide that holders of allowed interests will receive, in addition to their current treatment, a share of up to $1.38 million that will be retained from excess sale proceeds.

The plan will be further amended to include in the definition of “litigation trust cash contribution” that $50,000 payable from the settlement fund will be escrowed to be used solely for the benefit of equity committee designees on an oversight committee to investigate and object to any settlement of claims proposed by the litigation trustee.

The administrative and priority claims reserve to be established under the plan will include $1.25 million in specified expenses of CRG for responding to discovery.

In addition, Gibson Dunn & Crutcher LLP and Houlihan agreed not to seek allowance of compensation in Synergy’s cases in excess of $2.5 million, with $625,000 of that amount payable to Houlihan and $1.875 million payable to Gibson.

The plan confirmation hearing is scheduled for April 23.

Synergy is a New York-based biopharmaceutical company focused on the development and commercialization of novel gastrointestinal therapies. The company filed bankruptcy on Dec. 12 under Chapter 11 case number 18-14010.

© 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.