Melinta Therapeutics bid procedures and cash collateral use approved

By Caroline Salls

Pittsburgh, Feb. 11 – Melinta Therapeutics, Inc. received court approval of the bid procedures for the proposed sale of substantially all of its assets, according to an order filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Melinta filed bankruptcy to implement a restructuring support agreement reached with lenders Deerfield Private Design Fund III, LP and Deerfield Private Design Fund IV, LP.

Under the restructuring agreement, the supporting lenders would acquire the company as a going concern by exchanging $140 million of secured claims arising under its senior credit facility for 100% of the equity to be issued by reorganized Melinta under a pre-negotiated Chapter 11 plan of reorganization.

The transaction is subject to the receipt of higher or better offers under a court-supervised auction process. If the stalking horse bidder is not ultimately the winning bidder, Melinta will reimburse up to $2 million of its transaction-related expenses.

Competing bids, which are due by 4 p.m. ET on March 2, must be for at least $140 million, representing the total amount of pre-bankruptcy credit agreement claims and an up to $2 million expense reimbursement to be paid if the lenders are not the high bidder, plus a $1 million overbid amount.

An auction will be held on March 6, if necessary.

The restructuring support agreement/sale hearing is scheduled to begin on March 13.

In addition, Melinta received court approval to use the cash collateral of its pre-bankruptcy secured parties to fund its operations while in bankruptcy.

The cash collateral use will expire on April 30, unless a termination event occurs before that date.

Melinta is an antibiotics company based in New Haven, Conn. The company filed bankruptcy on Dec. 27 under Chapter 11 case number 19-12748.

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