Aphton files liquidation plan; administrative, secured and unsecured priority claims to be paid in full

By Caroline Salls

Pittsburgh, Jan. 10 - Aphton Corp. filed its plan of liquidation and related disclosure statement Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

According to the disclosure statement, Aphton expects to have about $100,000 to $250,000 in cash to distribute to creditors. In addition, the plan administrator may liquidate the company's remaining assets, including litigation claims, avoidance actions, intellectual property, collection of deposits and return of escrowed funds and miscellaneous physical assets.

Holders of administrative, secured and unsecured priority claims will be paid in full.

Holders of general unsecured claims will receive their share of the plan administrator assets in one or more distributions, depending on the amount of reserves necessary for payment of disputed claims and estimates of plan administrator costs and expenses.

The disclosure statement said unsecured creditors could recover between zero and $0.62 on the dollar.

If all other claims are paid in full, which the company said is unlikely, holders of subordinated claims will receive the remaining plan administrator assets.

Equity interests will be cancelled unless the company holds a stock sale before the effective date. If a stock sale is held, holders of equity interests would retain their interests.

A hearing on approval of the disclosure statement is scheduled for Feb. 22.

Aphton, a Philadelphia-based biopharmaceutical company, filed for bankruptcy on May 23, 2006. Its Chapter 11 case number is 06-10510.

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