Oscient emerges from bankruptcy as liquidation plan takes effect

By Caroline Salls

Pittsburgh, June 30 - Oscient Pharmaceuticals Corp.'s plan of liquidation took effect on Wednesday, according to a filing with the U.S. Bankruptcy Court for the District of Massachusetts.

The plan was confirmed on Tuesday.

Under the plan, the company will liquidate its estates and distribute remaining assets to creditors.

As previously reported, the plan also incorporates a settlement with debtor Guardian II Acquisition Corp. and Paul Royalty Fund Holdings II that will increase the recovery for unsecured creditors to 18.9% from 9.6% and reduce the amount of claims against Oscient by $49.7 million through Paul Royalty's waiver of 80% of its claim.

Treatment of creditors will include:

• Holders of administrative claims, priority tax claims and other priority claims will be paid in full in cash;

• Holders of secured claims will be paid in full in cash or receive the collateral securing the claim;

• Holders of Oscient unsecured claims will receive a share of Oscient trust interests; and

• Holders of subordinated securities claims, Guardian second-lien claims and Guardian unsecured claims and equity interests will receive no distribution.

Oscient, a Waltham, Mass., commercial-stage pharmaceutical company, filed for bankruptcy on July 13, 2009. Its Chapter 11 case number is 09-16576.

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