K-V Pharmaceutical filed with the U.S. Bankruptcy Court a Sixth Amended Joint Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, “The overall purpose of the Plan is to provide for the restructuring of the Debtors’ liabilities in a manner designed to maximize recovery to stakeholders and to enhance the financial viability of the Reorganized Debtors. The Plan reflects an agreement and compromise (the ‘Global Settlement’) among the Debtors, the Creditors’ Committee, the holders of at least 75% in dollar amount of the Class 3 Senior Secured Notes Claims, and the holders of approximately 97% in dollar amount of Class 6 Convertible Subordinated Notes Claims. Under this agreement and compromise: (a) each holder of an Allowed Senior Secured Notes Claim will receive its pro rata share of a Cash distribution in the amount of (i) $231,409,850 (i.e., the total amount of Senior Secured Notes Claims for prepetition principal and interest owing under the Senior Secured Notes less unamortized original issue discount); plus (ii) the amount of any postpetition interest and accreted original issue discount amount determined by the Bankruptcy Court to be owed to the holders of Senior Secured Notes under the subordination provisions of the Convertible Subordinated Notes Indenture (which amounts, if any, shall be determined by the Bankruptcy Court in connection with confirmation of the Plan); (b) the Debtors’ existing indebtedness under the DIP Credit Agreement will be paid in full in Cash; (c) the Debtors’ existing indebtedness in respect of Convertible Subordinated Notes Claims will be cancelled and exchanged for 7% of the New Common Stock of Reorganized KV; and (d) each holder of an Allowed General Unsecured Claim against any Debtor shall receive Cash in an amount equal its Pro Rata Share of $10,250,000.” The Court Scheduled an August 28, 2013 hearing to confirm the Plan.

Read more Bankruptcy News