Lucira Health receives interim approval of disclosure statement

By Sarah Lizee

Olympia, Wash., July 31 – Lucira Health, Inc. received interim approval of the disclosure statement for its Chapter 11 plan of liquidation from the U.S. Bankruptcy Court for the District of Delaware on Friday, according to an order.

The combined hearing on final approval of the disclosure statement and confirmation of the plan is scheduled for Sept. 19.

As previously reported, Lucira sold its assets to Pfizer Inc. on April 20.

The plan provides for the appointment of a liquidating trustee that will administer and liquidate all assets, object to and settle claims, and prosecute retained causes of action.

The plan also provides for the debtor’s release of claims and causes of action against certain parties, as well as the release of claims and causes of action against certain third parties by certain claimholders.

All interests in the debtor will be canceled and the company will be dissolved.

Secured claims and other priority claims will be paid in full.

Holders of general unsecured claims will receive their pro rata right to recovery from a liquidating trust. This is the only class entitled to vote on the plan.

Holders of section 510(b) claims will receive nothing.

Committee objection

The official committee of unsecured creditors had objected to the disclosure statement, stressing the importance of preserving estate claims carved out of the sale.

However, the committee was later disbanded by the U.S. trustee overseeing the case on July 10.

The committee’s former counsel said in a letter filed shortly after the disbandment that the group had negotiated certain critical modifications in connection with the sale to Pfizer.

Two of the main components included preservation of claims and causes of action to be pursued by the committee or a post-confirmation fiduciary on behalf of general unsecured creditors, and the agreement that any general unsecured creditor whose claim was assumed and assigned to the buyer, agree to waive any deficiency claim against the estate.

Through the sale, each committee member’s contract with the debtor was designated as an assigned contract or transition contract, and as a result, each member’s contract was assumed and assigned, and each member was either paid in full or otherwise waived any deficiency claim against the estate.

As such, each committee member no longer had a prepetition claim against the debtor, and each member resigned.

While at least two creditors submitted questionnaires expressing interest in joining the committee as new members, the U.S. trustee said there wasn’t enough interest to reconstitute the committee.

At the disclosure statement hearing, counsel for the company said amendments were made to the plan in response to the objection.

Lucira is a medical technology company based in Emeryville, Calif. The company filed bankruptcy on Feb. 22 under Chapter 11 case number 23-10242.

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