Medly trustee objects to timeline with stalking horse bidder

Chicago, Dec. 29 – Medly Health Inc.’s sale timeline with stalking horse bidder MedPharmaca Holdings, Inc. has elicited an objection from Region 3 U.S. trustee Andrew R. Vara, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

As a reminder, on the Dec. 9 petition date Medly Health announced that it was seeking authority to enter into a stalking horse agreement for substantially all of the assets of the Pharmaca business for $18.5 million, less than the $20 million the debtors owe on account of first-lien debt.

Regarding the stalking horse agreement, the debtors sought approval for a break-up fee of $450,000 and a reimbursement for up to $500,000 in expenses.

Medly was also seeking approval for an accelerated sale timetable, including a bid deadline of Jan. 13, an auction date of Jan. 17 and a sale hearing of Jan. 19. The bid deadline is merely 35 days after the petition date, trustee Vara says, including the holiday season.

Vara objects to the bid protections, saying they are unnecessary in this instance and only chill bidding, making it more difficult for other bidders to propose a qualified bid.

He also objects to the timeline, saying that there is no indication that a complete, formal marketing process has taken place.

The trustee requests the court deny approval of the sale procedures and the stalking horse agreement.

The Boulder, Colo.-based pharmacy company filed Chapter 11 bankruptcy on Dec. 9 under case number 22-11257.

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