Lensar plan effective May 11; PDL Biopharma takes equity ownership

By Caroline Salls

Pittsburgh, May 11 – Lensar, Inc.’s second amended plan of reorganization took effect on Thursday, according to an 8-K filed with the Securities and Exchange Commission by PDL Biopharma, Inc., which converted most of the company’s debt to an equity ownership position under the plan.

The plan was confirmed on April 26 by the U.S. Bankruptcy Court for the District of Delaware.

Lensar and PDL said in a joint news release that Lensar will become a wholly owned subsidiary of PDL.

With the debt reduction, the companies said Lensar’s balance sheet is significantly strengthened and, under PDL’s new ownership, will be well positioned to support its future growth in the laser assisted refractive cataract surgery sector.

“PDL Biopharma remains committed to the success of Lensar and its promising refractive cataract technology,” PDL president and chief executive officer John P. McLaughlin said in the release.

Since filing Chapter 11 bankruptcy in December, Lensar said it has maintained its normal business operations, including the commercial rollout in January of its third system upgrade in less than two years.

“Working closely with the team at Lensar, we have supported operations at an optimal level throughout this process,” McLaughlin said in the release. “Consequently, important service, manufacturing and regulatory milestones have been achieved, positioning the company for success moving forward.”

Under the confirmed plan:

• PDL, as Lensar’s principal secured creditor, was issued 100% of the new equity, consisting of common stock and mandatorily redeemable preferred stock, in exchange for the cancellation of a second amended and restated credit agreement and a reaffirmed 2013 credit agreement;

• Lensar entered into a new credit facility in the amount of $8.6 million from PDL, of which $2.5 million will be used to repay PDL’s advances during the bankruptcy process;

• General unsecured claims will be paid in full; and

• Equity interests in Lensar outstanding immediately before the plan effective date were cancelled, and holders of those interests will not receive any distribution.

Also on the plan effective date, McLaughlin, Peter S. Garcia, Danny J Hart Jr. and Nicholas T. Curtis were elected as the directors of Lensar.

Lensar is an Orlando, Fla.-based next-generation cataract surgery laser technology company. The company filed for bankruptcy on Dec. 16 under Chapter 11 case number 16-12808.

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