Egalet Corporation – Files Plan and Disclosure Statement, Exhibits Include Valuation Analysis, Liquidation Analysis, RSA and Financial Projections

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October 31, 2018 – Egalet Corporation filed a Chapter 11 Plan of Reorganization [Docket No. 16] and related Disclosure Statement [Docket No. 17]. The Disclosure Statement notes, “The Plan and this Disclosure Statement are the result of months of discussions followed by extensive and vigorous negotiations among the Company, the Supporting Noteholders and Iroko. The culmination of these negotiations was the entry into the Restructuring Support Agreement, upon which the Plan is premised, by and among the Company and the Supporting Noteholders. The Debtors firmly believe the Restructuring Support Agreement—with the requisite support necessary to confirm a plan under 1126(c) of the Bankruptcy Code—puts the Debtors on firm footing to expeditiously prosecute these cases to conclusion. The key components of the Plan are as follows:
 
  • Payment in full, in cash, of all Allowed Administrative Claims, Priority Tax Claims, statutory fees, Professional Fee Claims, Other Priority Claims and Other Secured Claims
  • The conversion of $80 million of First Lien Secured Notes Claims into (i) $50 million in aggregate principal amount of the Series A-1 Notes, (ii) the First Lien Note Equity Distribution, (iii) $20 million in cash, less the aggregate amount of Adequate Protection Payments (as defined in the Cash Collateral Orders) actually received by holders of First Lien Secured Notes Claims pursuant to the Cash Collateral Orders and (iv) cash in an amount equal to the fees and expenses of the First Lien Secured Notes Trustee (as to which it is anticipated that the First Lien Secured Notes Trustee will exercise its contractual lien rights prior to distribution), to the extent not otherwise paid on or prior to the Effective Date, which will not be paid directly to any holder, but instead will be paid directly to the First Lien Secured Notes Trustee on account of any such fees and expenses; provided, however, that if the Debtors elect to consummate the Rights Offering, the shares of New Egalet Common Stock otherwise allocable to the First Lien Note Equity Distribution shall be distributed pursuant to the Rights Offering, and the holders of First Lien Secured Notes Claims shall receive $10 million in cash instead of the First Lien Note Equity Distribution
  • The conversion of $48.6 million of Convertible Notes Claims into (i) a number of shares of New Egalet Common Stock representing, in the aggregate, 31.62% of the New Egalet Common Stock as of the Effective Date (including any New Egalet Common Stock issuable upon exercise of the New Warrants) (subject to dilution only on account of the Commitment Premium Stock, if any, and the Management Incentive Plan), or New Warrants in lieu of a portion of such shares solely to the extent set forth in Article VII(C) of the Plan, and (ii) if the Debtors elect to consummate the Rights Offering and such holder is an Eligible Holder, the Subscription Rights
  • The cancellation of all existing Preferred Stock and existing common equity interests in Egalet Corporation
  • The consummation of the Iroko Acquisition pursuant to the Purchase Agreement.”
 
The following exhibits were filed with the Disclosure Statement: 
 
  • Exhibit 1 – The Plan 
  • Exhibit 2 – Liquidation Analysis
  • Exhibit 3 – Restructuring Support Agreement 
  • Exhibit 4 – Financial Projections
  • Exhibit 5 – Valuation Analysis

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