Synergy Pharmaceuticals committee objects to asset sale procedures

By Caroline Salls

Pittsburgh, Dec. 31 – Synergy Pharmaceuticals Inc.’s official committee of unsecured creditors objected to the bid procedures for the company’s proposed asset sale, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The committee said that, while the stalking horse agreement establishes a base price for the assets, “it does so at unacceptable costs and damage to the debtors’ estates and particularly the recoveries of the debtors’ unsecured creditors.”

Specifically, the committee said the stalking horse bid price “conveniently just barely clears the purported amount of the secured debt” and includes a sale structure that greatly inhibits competitive bidding and a distribution scheme dictating how the sale proceeds will be applied.

In addition, the creditor group said Synergy’s debtor-in-possession lenders and stalking horse bidder have agreed to the terms of the sale and “only come to this court seeking a quick approval in order to protect the stalking horse bidder and the debtors’ management and board of directors from future scrutiny.”

A hearing is scheduled for Jan. 4.

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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