Endo files reorganization plan to emerge from bankruptcy
Endo shared that it has taken an important step toward concluding its financial restructuring process by filing a proposed Plan of Reorganization and related Disclosure Statement with the U.S. Bankruptcy Court for the Southern District of New York. These filings pave the way for Endo to promptly emerge from Chapter 11 with a strengthened balance sheet and to advance its ongoing business transformation, the company said.
The Plan is a preferred alternative to the previously announced sale of substantially all the company’s assets to holders of Endo’s first lien debt (the “Ad Hoc First Lien Group”) under Section 363 of the U.S. Bankruptcy Code, with substantially similar terms: a purchase of substantially all of the company’s assets via a credit bid of existing first lien debt, the assumption of certain liabilities and offers of employment to all of Endo’s active team members. This ownership transfer, as previously announced, will result in a significant reduction in outstanding indebtedness relative to Endo’s current capital structure and materially benefit opioid and other litigation-related claimants through the establishment of funded trusts. Endo is working with its stakeholders to finalize the documentation related to the transaction.
In addition to the previously reached settlements, the Plan incorporates the recently announced economic settlement in principle with the U.S. Department of Justice providing for payment of $364.9 million over 10 years, or $200 million if the obligation is paid in full on the Plan effective date, plus up to an additional $100 million if the company’s EBITDA exceeds the defined baseline during the period 2024 to 2028. This settlement is subject to satisfactory resolution of criminal and civil fraud claims against the Company related to the historical sale and marketing of Opana ER, which the Company ceased promoting directly to U.S. healthcare providers in 2016.
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“We are pleased to have reached this milestone in our financial restructuring, during which time we’ve made steady progress advancing our strategic priorities,” said Blaise Coleman, Endo’s president and CEO. “The Plan provides a clear path forward for Endo to emerge from this process on stronger financial footing in the second quarter of 2024.”
The company will seek conditional approval of its Disclosure Statement at a hearing before the Court currently scheduled for Jan. 9, 2024. Assuming Court approval, the Disclosure Statement and Plan will be mailed to Endo’s creditors eligible to vote, and the Court will schedule a hearing to confirm the Plan.
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