RVL Pharmaceuticals’ operating subsidiaries file Chapter 11 bankruptcy

By Sarah Lizee

Olympia, Wash., Oct. 12 – RVL Pharmaceuticals plc’s U.S. operating subsidiaries, RevitaLid Pharmaceutical Corp., RVL Pharmaceuticals, Inc. and RVL Pharmacy, LLC, made a pre-packaged Chapter 11 bankruptcy filing on Thursday in the U.S. Bankruptcy Court for the District of Delaware, according to a press release.

The companies have reached an agreement with their sole secured lenders, funds managed by Athyrium Capital Management, and other key stakeholders, on a change-of-control transaction.

The reorganization provides a structured pathway for the RVL subsidiaries to significantly reduce their debt, while enabling them to streamline operations, maintain jobs and position themselves under new ownership, the parent company said.

As a result of the reorganization, RVL is expected to start the wind-down of any remaining operations of the company and its subsidiaries, other than the debtor subsidiaries.

RVL’s public equity is expected to be canceled upon completion of its wind-down, anticipated to be during 2024, likely resulting in no recovery to public shareholders.

Under the reorganization, funds managed by Athyrium will exchange their outstanding debt into equity of a newly formed entity that will either directly hold 100% of the equity interests of Revitalid Pharmaceutical, Corp., which is currently an indirect wholly owned subsidiary of the company, or indirectly hold 100% of the equity interests of RVL Pharmaceuticals, Inc., which is currently a wholly owned subsidiary of Revitalid Pharmaceutical, Corp. and the direct parent of RVL Pharmacy, LLC.

In addition, funds managed by Athyrium are committed to providing up to $17.5 million in incremental debtor-in-possession financing to support the RVL subsidiaries’ operations during the reorganization and to support their long-term growth and liquidity, RVL said.

According to the plan, holders of class 3 secured note claims will receive their pro rata share of 97.5% of the equity of New Common Equity HoldCo, subject to dilution by the management incentive plan.

Holders of class 4 general unsecured claims will receive payment in full in cash, have their claims reinstated, or receive other treatment leaving the claims unimpaired.

Holders of class 5 SPA rejection unsecured claims will receive their pro rata share of the SPA rejection unsecured claims recovery, subject to dilution by the management incentive plan.

Holders of other secured claims and priority non-tax claims are expected to receive 100% recovery.

Intercompany claims are unimpaired.

The reorganization contemplates that all of RVL subsidiaries’ vendors, suppliers and customers will be unaffected by the reorganization, and their employees will remain employed by these entities.

In the petition, the debtors listed 200 to 999 creditors, $100 million to $500 million in assets and $100 million to $500 million in liabilities.

No creditors were listed with unsecured claims of $1 million or more.

The RVL subsidiaries are being advised by Ropes & Gray LLP, Richards, Layton & Finger, PA and A&L Goodbody LLP as legal counsel, Ernst & Young LLP as financial adviser and Ducera Partners LLC as investment banker.

Bridgewater, N.J.-based RVL Pharmaceuticals is a specialty pharmaceutical company focused on the commercialization of Upneeq, which is used for the treatment of acquired blepharoptosis, or droopy eyelid, in adults. The Chapter 11 case number is 23-11704.

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