Accentia Biopharmaceuticals gets court OK of Laurus dispute settlement

By Caroline Salls

Pittsburgh, June 8 - Accentia Biopharmaceuticals, Inc. received court approval of a claim and asset dispute settlement with Laurus Master Fund, Ltd., according to a Tuesday filing with the U.S. Bankruptcy Court for the Middle District of Florida.

The company said the agreement settles disputes over the allowed amount of claims filed by Laurus and Valens U.S. SPV I, LLC, Valens Offshore SPV I, LLC, PSource Structured Debt Ltd. and LV Administrative Services, Inc. against Accentia.

The settlement also covers disputes over the Accentia assets securing the allowed Laurus/Valens claims, the future royalty rights in the Biovest debtor's biologic and other products and the allowed equity interests of Laurus and Valens in Accentia and Biovest.

According to the motion, the settlement will give both Biovest and Accentia "the breathing room necessary to concentrate on achieving regulatory and other approvals of their drug candidates" and allowed them to propose plans to emerge from bankruptcy as soon as possible.

Biovest settlement terms

Under the settlement:

• Laurus/Valens will have a $24.9 million secured claim against Biovest, which includes a reduction in Laurus/Valens 20% equity ownership in Biovest common stock to be received in exchange for a reduction of a 19.5% royalty in the Biovest biologic products;

• The Biovest secured claim will be evidenced for one or more two-year term A notes, which will bear interest at 8%;

• Laurus/Valens will have an additional $1.16 million secured claim against Biovest in settlement of $7.33 million in interest, penalties and fees;

• The Biovest additional secured claim will be evidenced by one or more three-year 8% term B notes;

• All or any portion of the term A and term B notes can be converted into shares of Biovest common stock;

• The Biovest term notes will be guaranteed by Accentia, up to a maximum of $4.99 million, and the Accentia guarantee will be secured by a pledge of 20.12 million shares of Biovest common stock owned by Accentia;

• All warrants held by Laurus/Valens to purchase shares of Biovest common stock will be terminated at closing in exchange for the number of shares of Biovest common stock equal to 9.99% of the issued and outstanding shares as of the closing date;

• Laurus/Valens will receive a new perpetual royalty equal to 6.25% of the gross revenues from the sale or license of the Biovest biologic products and, as consideration for the reduction of the Laurus/Valens royalty, 20% of the Biovest common shares at closing;

• Laurus/Valens will support and vote to accept Biovest's plan;

Accentia deal

• Laurus/Valens will have an $8.8 million secured claim against Accentia, which will be evidenced by one or more two-year 8½% term notes;

• Accentia will be required to make mandatory prepayments on the term notes, including a $4.4 million payment on the 18-month anniversary of the closing date;

• All or a portion of the term notes can be converted into shares of Accentia common stock;

• As further collateral for the term notes, Accentia will pledge to Laurus/ Valens all of its equity interests in Analytica and the 20.12 million shares of the Biovest common stock it owns;

• Laurus/Valens will have a $2.62 million claim in connection with preferred stock, which will be converted into 983,145 shares of Accentia common stock; and

• All warrants held by Laurus/Valens to purchase Accentia common stock will be terminated.

Accentia, a biopharmaceutical company based in Tampa, Fla., filed for bankruptcy on Nov. 10, 2008. Its Chapter 11 case number is 08-17795.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.