Able Laboratories exits Chapter 11 bankruptcy

By Caroline Salls

Pittsburgh, Aug. 10 - Able Laboratories Inc. exited Chapter 11 bankruptcy when its plan of liquidation took effect Wednesday, according to a Thursday filing with the U.S. Bankruptcy Court for the District of New Jersey.

The plan was confirmed on July 17.

Under the plan, the company will continue its product recall, ensure compliance with all Food and Drug Administration regulations and procedures, wind up its affairs and liquidate any remaining assets of its estate.

The plan will be funded from the proceeds of the sale of the company, the collection of outstanding receivables, other miscellaneous assets not sold and from litigation trust proceeds.

Treatment of creditors under the plan will include:

• Holders of secured claims will receive 100% recovery in either cash, the net proceeds of the sale of the collateral securing the claim or the collateral securing the claim, at the company's option;

• Holders of general unsecured claims will receive about 27% recovery in their share of the class 3 cash pool, which will be funded by available cash;

• Holders of subordinated claims will receive no distribution unless the general unsecured claims class is paid in full; and

• Equity holders will receive no distribution unless the general unsecured claims and subordinated claims classes are paid in full.

Able is a Cranbury, N.J., developer and manufacturer of general pharmaceuticals. The company filed for bankruptcy on July 11, 2005. Its Chapter 11 case number is 05-33129.

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