Endo exits Chapter 11 bankruptcy following sale to lender entity

By Sarah Lizee

Olympia, Wash., April 23 – Endo, Inc. has completed the previously announced acquisition of substantially all of the assets of Endo International plc, as contemplated under Endo’s Chapter 11 plan of reorganization, according to a Tuesday press release.

Over 95% of Endo, Inc. is owned by holders of the company's first-lien debt.

With the plan's effectiveness, Endo International’s operating assets have exited the Chapter 11 financial restructuring process with significantly reduced outstanding debt and resolution of Endo International’s pre-bankruptcy litigation overhang, the company said.

“We believe Endo is well positioned to create value for our stakeholders over the long-term as we execute on our strategic priorities,” Blaise Coleman, president and chief executive officer, said in the release.

“In particular, we are focused on growing our branded pharmaceuticals segment, anchored by Xiaflex, reviving growth in our sterile injectables segment through the launch of differentiated new products, and leveraging our improved balance sheet to drive new growth investments.”

The Endo board of directors is comprised of seven members, including six independent directors.

Endo is currently a privately held company but has begun the process of listing its equity on a national stock exchange.

As previously reported, Endo Finance Holdings, Inc., a subsidiary of Endo, Inc., recently priced a $1 billion issue of seven-year senior secured notes, and Endo, Inc. priced a $1.5 billion seven-year term loan B, with proceeds being used to fund the exit from bankruptcy.

Under the plan, which was confirmed in March, each holder of a class 3 first-lien claim will receive their pro rata of 96.3% of the purchaser equity (subject to dilution). If an exit minimum cash sweep trigger occurred, they would also receive a pro rata share of cash from the exit minimum cash sweep, and/or the net proceeds of syndicated exit financing, after giving effect to the effective date transactions. Holders were also to receive a pro rata share of first-lien accrued adequate protection payments and first-lien subscription rights.

Holders of the debtors’ $2.34 billion in second-lien notes and unsecured notes, which make up class 4(A), were to receive GUC subscription rights. On the effective date, these claims were to automatically be channeled exclusively to the GUC trust.

Holders of the debtors’ $2.34 billion in second-lien notes claims and unsecured notes claims were to receive class A units entitling them to about $23.3 million in cash and a 93.09% interest in the GUC trust litigation consideration. In addition, holders were to receive the GUC trust purchaser equity, and those noteholders that participated in a GUC rights offering would have the ability to purchase additional purchaser equity.

Holders of other general unsecured claims will receive class B units entitling them to their portion of a reserve for such claims funded with $2 million in cash and the proceeds of a 1.8% interest in a GUC trust litigation consideration.

Holders of mesh claims were to recover from the mesh claims trust, funded with $2 million in cash, 50% of the net proceeds of certain products liability policies allocable to liability for mesh claims, and a 1.75% interest in the GUC trust litigation consideration. The remaining 50% of the proceeds of certain products liability policies allocable to liability for mesh claims was to be distributed as GUC trust litigation consideration.

Holders of Ranitidine claims were to recover from the Ranitidine claims trust, funded with $200,000 in cash and 20% of the net proceeds of certain products liability policies allocable to liability for Ranitidine claims. The remaining 80% of the proceeds of certain products liability policies allocable to liability for Ranitidine claims was to be distributed as GUC trust litigation consideration.

Holders of generics price fixing claims would recover from the generics price fixing trust, which would be funded with $16 million in cash.

Holders of reverse payment claims will recover from the reverse payment trust, which was to be funded with $6.5 million in cash and a 3.36% interest in the GUC trust litigation consideration.

Holders of subordinated, recharacterized and disallowed claims and equity received nothing under the plan.

Endo is a Dublin-based specialty pharmaceutical company that filed bankruptcy on Aug. 16, 2022. The Chapter 11 case number is 22-22549.

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