Vivus receives confirmation of Chapter 11 plan of reorganization

By Sarah Lizee

Olympia, Wash., Dec. 10 – Vivus, Inc.’s second amended Chapter 11 plan of reorganization was confirmed Thursday by the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Vivus made its pre-packaged bankruptcy filing after completing a solicitation of a plan of reorganization under which IEH Biopharma LLC will take 100% ownership of the company.

According to the disclosure statement, plan distributions will be funded with cash on hand and the proceeds from an exit facility.

Holders of other priority claims will receive payment in full in cash or have their claims reinstated.

Holders of other secured claims will receive payment in full in cash, reinstatement of their claims or the collateral securing their claims.

The $61.35 million principal amount of the secured note claims held by IEH Biopharma will be paid in full in cash from the proceeds of the exit facility or exchanged dollar for dollar for new debt under the exit facility. All other fees payable regarding the secured notes indenture will be paid in full in cash from the proceeds of the exit facility.

IEH Biopharma, the holder of the convertible note claim, will receive 100% of the reorganized Vivus equity.

The debtors will continue to pay or dispute each allowed general unsecured claim in the ordinary course of business after the effective date as if the Chapter 11 cases had never been commenced.

Intercompany claims will be reinstated, canceled or compromised as determined by the reorganized debtors.

All interests will be canceled, and holders will receive no distribution.

Subordinated claims will be discharged with no distribution.

Campbell, Calif.-based Vivus is a pharmaceutical company that filed bankruptcy on July 7. The Chapter 11 case number is 20-11779.

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