Able files recast plan with bankruptcy court
BY OUR PHARMA CORRESPONDENT
March 25, 2006
New Jersey-based Able Laboratories has filed a proposed
reorganization plan and disclosure statement relating to the plan with the US Bankruptcy Court for the district.
The plan provides for the continuation of Able's business in order for it to complete the ongoing recall of products and other measures required by the FDA, for it to assist with other government
agencies with inquires regarding Able's prior operations, and to sell any remaining assets and wind down its operations.
Under the terms of the proposed plan, claims secured by collateral or rights of setoff and claims entitled to priority in payment will be paid off in full. Holders of general unsecured claims will receive a pro-rata portion of available cash, as defined by the plan.
The percentage distribution to be paid to holder of general unsecured claims is uncertain, and will depend upon the amount of general unsecured claims that are allowed and the amount of available cash.
However, the plan allows payment of general unsecured claims in amounts of US$500 or less to be paid in full. Able added that the plan and disclosure statement provide that holders of subordinated claims, if any, will not receive any distributions unless all general unsecured claims are paid in full; Able noted it was extremely remote that general unsecured claims would be paid in full.
Also, equity interests will not receive any distributions unless all general unsecured claims and subordinated claims are paid in full, which is again remote, and that the equity of the company has no value.
The plan will be funded from assets held by Able; these are mainly cash remaining from the sale of the majority of its assets to Sun Pharmaceutical Industries.
The plan also provides for the creation of a litigation trust to hold and assert, for the benefit of Able's creditors, certain claims and causes of action held by Able. The firm noted that the Bankruptcy Court has scheduled a hearing to approve the disclosure statement on 6th April 2006 at the US Bankruptcy Court in Trenton, New Jersey.
However, Able added that there could be no assurances that the disclosure statement would be approved, or that the Bankruptcy Court would confirm Able's plan. In addition, there could be no assurance that even if the plan is confirmed and enacted, it would achieve all of its objectives.
Able Laboratories, Inc. is a developer and manufacturer of generic pharmaceutical products in tablet, capsule, liquid and suppository dosage forms.