Accentia, Biovest debtor expect to emerge from bankruptcy on Nov. 17

By Caroline Salls

Pittsburgh, Nov. 2 - Accentia Biopharmaceuticals, Inc. and its Biovest International, Inc. subsidiary expect to emerge from Chapter 11 bankruptcy on Nov. 17, according to 8-Ks filed Tuesday with the Securities and Exchange Commission.

As previously reported, the companies' reorganization plans were confirmed last week by the U.S. Bankruptcy Court for the Middle District of Florida.

Under Accentia's plan, $33.1 million of pre-bankruptcy secured debt will be restructured; $26.2 million of unsecured debt outstanding under the company's pre-bankruptcy debt instruments will be satisfied either through issuance of a new interest-bearing unsecured note or conversion into new common stock; and $9 million in general unsecured debt will be satisfied through either issuance of a new 40-month interest-bearing unsecured note or conversion into common stock.

All outstanding shares of the company's common stock will remain outstanding after the plan takes effect.

The reorganized company will be authorized to issue up to 150 million shares of preferred stock and up to 300 million shares of common stock.

A total of 59.55 million shares of common stock will be issued and outstanding on the plan effective date, and 46.76 million shares will be reserved to be distributed under the plan.

Biovest plan details

Under Biovest's plan, up to $3 million of super-priority secured debtor-in-possession financing will be paid via issuance of a new secured convertible DIP note; and $44 million of outstanding pre-bankruptcy secured debt will be exchanged for a $24.9 million two-year note and a $4.1 million three-year note, as well as through conversion of $12 million of secured debt due to Accentia into Biovest's common stock.

In addition, $1 million of unsecured debt issued under Biovest's pre-bankruptcy debt instruments will be satisfied either through issuance of a new interest-bearing unsecured note or conversion into common stock; and $8 million in general unsecured debt will be satisfied through either issuance of a new 40-month interest-bearing unsecured note or conversion into common stock.

All shares will remain outstanding after the plan effective date.

Biovest will be authorized to issue up to 50 million shares of preferred stock and up to 300 million shares of common stock, including 45 million shares reserved for issuance under the plan, 7.69 million shares reserved in connection with investor DIP notes at a conversion price of $0.91 per share and 8.16 million shares reserved for issuance under investor DIP series A warrants at a price of $1.45 per share.

Accentia, a biopharmaceutical company based in Tampa, Fla., filed for bankruptcy on Nov. 10, 2008. Its Chapter 11 case number is 08-17795.

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