Unipharma’s committee of unsecured creditors objects to sale process

By Sarah Lizee

Olympia, Wash., Dec. 24 – Unipharma, LLC’s official committee of unsecured creditors objected to the bidding procedures for the company’s assets, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of Florida.

The group claims the proposed bidding procedures, coupled with the proposed stalking horse bid agreement and the proposed debtor-in-possession facility, serve only to advance the interests of the debtors’ alleged secured creditor, NHTV ULM Holdings LLC.

As previously reported, Unipharma defaulted on its $61.3 million senior secured loan with NHTV, and later the lender acted by removing and replacing the debtors’ management. NHTV agreed to act as stalking horse bidder for the company’s assets, provide DIP financing and access to cash collateral to fund the sale process and working capital needs pending the sale.

“The debtors, at NHTV’s behest, have designed an expedited sale process that allows NHTV to test the market for a sale, to shed unwanted liabilities and shareholder disputes, secure releases for itself, and to significantly improve its position vis-à-vis the unsecured creditors by securing liens on unencumbered assets, including potentially valuable insider avoidance actions and tort claims against prior officers and directors,” the committee said.

“The court should not approve agreements or a sale process that so heavily tip the scales in favor of NHTV and provides no assurances of a recovery for unsecured creditors.”

The committee said the bidding procedures should be denied unless NHTV agrees to modify the stalking horse bid agreement and the bidding procedures to extend the sale process by four weeks to allow sufficient time for due diligence and to promote competitive bidding; condition the stalking horse bidder’s credit bidding rights so as not to chill bidding and burden the post-sale estate with the lingering DIP debt, expressly preserve the committee’s challenge rights and potential causes of action against NHTV and provide sufficient funding for a Chapter 11 plan with meaningful distributions to unsecured creditors.

Unipharma is a Tamarac, Fla., health care packaging company serving the pharmaceutical and nutraceutical sectors in the development, manufacturing and packaging of liquid, disposable and single-dose units. The company filed bankruptcy on Dec. 7 under Chapter 11 case number 20-23348.

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