REVA Medical files pre-packaged bankruptcy to cut debt by $90 million

By Caroline Salls

Pittsburgh, Jan. 14 – REVA Medical, Inc. filed Chapter 11 bankruptcy on Tuesday in the U.S. Bankruptcy Court for the District of Delaware.

REVA Medical president Jeffrey Anderson said in a statement filed with the court that the company’s financial issues stemmed from mounting liquidity challenges and negative publicity related to bioresorbable scaffolds, which resulted in a reduction in the company’s workforce.

Anderson said REVA executed a restructuring support agreement on Dec. 23 with lender agent Goldman Sachs International and some of its affiliates, Senrigan Capital Management and affiliates of Elliott Management Corp. The agreement sets the terms of a comprehensive restructuring to be implemented through a pre-packaged plan of reorganization.

The plan transactions will allow REVA to emerge from Chapter 11 substantially de-levered with overall debt levels decreased by more than $90 million, Anderson said.

Under the plan, all administrative claims, all priority claims, and the vast majority of general unsecured creditors will be paid in full.

Senior secured lenders and holders of the company’s convertible notes will receive equity interests in the reorganized REVA and a new limited liability company created to continue the development and commercialization of REVA’s bioresorbable polymer technologies for coronary artery disease and peripheral artery disease.

REVA is seeking court approval to use the cash collateral of its pre-bankruptcy secured parties to preserve the value of its estate while in bankruptcy.

According to court documents, REVA had $5.9 million in total assets and $104.5 million of total debt as of Monday.

The company’s largest unsecured creditors are Elliott Associates, LP of New York, with a $44.88 million convertible notes claim; Goldman Sachs International of London, with an $18.03 million convertible notes claim and a $9.17 million convertible notes claim; and Senrigan Master Fund and Senrigan Capital Group Ltd. of Hong Kong, with an $18.03 million convertible notes claim and a $3.65 million convertible notes claim.

DLA Piper LLP (US) is representing the company in its Chapter 11 proceedings.

The medical device company is based in San Diego. The Chapter 11 case number is 20-10072.

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