Synergy files plan, secures further interim access to DIP financing

By Caroline Salls

Pittsburgh, Dec. 24 – Synergy Pharmaceuticals Inc. filed its plan of reorganization and related disclosure statement Friday with the U.S. Bankruptcy Court for the Southern District of New York.

Administrative claims, debtor-in-possession financing claims, other secured claims, priority tax claims and other priority claims will be paid in full in cash.

Holders of term loan claims will receive a share of excess sale proceeds or cash, depending on the amount of asset sale proceeds realized and whether or not general unsecured creditors vote to accept the plan.

Holders of general unsecured claims will receive either cash or no distribution, with the amount of cash based on the amount of excess sale proceeds and the recovery based on whether or not the class votes to accept the plan.

Holders of section 510(b) claims will receive a share of directors’ and officers’ policy proceeds and a share of excess sale proceeds available after payment in full of general unsecured claims.

Holders of intercompany claims and intercompany interests will receive no distribution.

Holders of existing interests will receive a share of any excess sale proceeds remaining after payment in full of general unsecured claims.

In addition, the court entered a second interim order on Monday giving Synergy access to $8 million in debtor-in-possession financing.

The final DIP financing hearing is scheduled for Jan. 17.

As previously reported, Synergy obtained court approval to access $11.5 million of a proposed $45 million in new-money DIP financing under the first interim order entered on Dec. 14.

The company’s DIP financing package also includes $110 million of roll-up pre-bankruptcy loan obligations.

CRG Servicing LLC is the administrative agent.

The DIP facility will mature on the earliest of April 9, the closing of a sale of all or substantially all the company’s assets and acceleration of the loans.

Interest will accrue at a rate of Libor plus 950 basis points.

Synergy is a New York-based biopharmaceutical company focused on the development and commercialization of novel gastrointestinal therapies. The company filed bankruptcy on Dec. 12 under Chapter 11 case number 18-14010.

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