Pharmed creditors committee disputes bid selection process for Pal Laboratories sale

By Caroline Salls

Pittsburgh, Nov. 16 - Pharmed Group Holdings Inc.'s official committee of unsecured creditors objected to the bid procedures for the proposed sale of substantially all of the assets of Pal Laboratories, Inc. because the stalking horse bid was not selected through a formal sale process, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of Florida.

According to the objection, before Pharmed filed Chapter 11 bankruptcy, it entered into a stalking horse bidder agreement with PLD Acquisitions, LLC without going through a formal sales process.

Instead, the committee said the agreement resulted from private discussions between Pharmed and PLD.

The committee said the company did not hire investment banker Ladenburg Thalman to conduct a structured sales process until after the bankruptcy filing.

Because the company did not go through a formal sale process to determine the market value for the assets, the committee said it is concerned that the proposed stalking horse bid is inadequate.

In addition, the committee said it is concerned that a number of provisions in the stalking horse agreement will chill other potential bidders from making an offer for the assets.

The committee said it is in discussions with the company and the stalking horse bidder to attempt to negotiate changes to the stalking horse agreement.

Pharmed, a Miami-based full-line distributor of medical, surgical and rehabilitative supplies, filed for bankruptcy on Oct. 26. Its Chapter 11 case number is 07-19187.

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