Synergy Pharmaceuticals’ fourth amended reorganization plan effective

By Caroline Salls

Pittsburgh, May 2 – Synergy Pharmaceuticals, Inc.’s modified fourth amended plan of reorganization took effect on Wednesday, according to a notice filed with the U.S. Bankruptcy Court for the Southern District of New York.

The plan was confirmed on April 25.

As previously reported, Synergy received 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.

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.

Under the settlement, the plan was amended to provide that holders of allowed interests will receive, in addition to their current treatment calling for them to share in sale proceeds after payment of general unsecured creditors, a share of up to $1.38 million that will be retained from excess sale proceeds.

The plan was 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.

Administrative claims, debtor-in-possession financing claims, other secured claims, priority tax claims and other priority claims will be paid in full in cash.

Holders of term loan claims will receive a share of excess sale proceeds and a share of an administrative and priority claims reserve.

Holders of general unsecured claims will receive beneficial interests in a litigation trust and a share of excess sale proceeds.

Holders of intercompany claims and intercompany interests will receive no distribution.

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.