Tricida disclosure statement OK’d, but disputes over releases remain

By Sarah Lizee

Olympia, Wash., March 27 – Tricida, Inc. received approval of the disclosure statement for its Chapter 11 plan from the U.S. Bankruptcy Court for the District of Delaware.

The company is still mediating with the official committee of unsecured creditors and noteholders over some disputes relating to the plan, namely regarding the plan’s third-party releases.

Counsel for the company said at March 24 hearing that the company hopes to resolve those issues prior to confirmation.

As background, Tricida filed bankruptcy to facilitate a sale of its assets.

The company entered into a restructuring support agreement with the support of over 80% of its convertible noteholders. The company currently has about $204.5 million in debt under the convertible notes, including accrued interest.

The RSA also sets up a general framework for the treatment of claims against and interests in the debtor. In sum, holders of allowed general unsecured claims, along with the claims of the convertible noteholders, will be paid their pro rata right to recovery in cash on the effective date of the plan.

These claims will additionally have the right to a later true-up payment from a liquidating trust.

Under the plan, as currently proposed, holders of the $201.06 million of convertible noteholder claims, the $149.51 million Patheon claim and the $14.74 million of general unsecured claims are expected to receive an 8% recovery.

De minimis claims of less than $7,500 will receive 50% of the allowed amount of their claim in cash on the effective date, subject to an aggregate recovery amount for such claims of $60,000.

Finally, disputed general unsecured claims and the Patheon rejection claim will receive pro rata distributions from the liquidating trust at the time the size of their claims is determined and allowed.

Other priority claims and other secured claims will receive full recovery.

The San Francisco-based pharmaceutical company filed bankruptcy on Jan. 11 under Chapter 11 case number 23-10024.

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