Clarus Therapeutics, committee file Chapter 11 plan, disclosure statement

By Sarah Lizee

Olympia, Wash., Dec. 2 – Clarus Therapeutics Holdings, Inc. and its official committee of unsecured creditors filed a combined Chapter 11 plan of liquidation and disclosure statement Thursday in the U.S. Bankruptcy Court for the District of Delaware.

On Oct. 27, the company closed the sale of its testosterone drug Jatenzo to Tolmar, Inc. for $7.25 million, in addition to other contingent consideration based on sales of the drug.

Clarus said the net cash sale proceeds, along with its excess cash after funding a wind-down budget, in the total of $8.34 million were paid to the indenture trustee for the benefit of secured parties.

The plan provides for the distribution of the debtors’ assets already liquidated or to be liquidated over time to holders of allowed claims. A creditor trust will be established, and a plan administrator will be appointed.

Under the plan, holders of priority non-tax claims will receive cash equal to their claims or other treatment leaving the claims unimpaired.

Holders of other secured claims will receive the collateral securing their claims, cash equal to their claims or other treatment leaving the claims unimpaired.

Holders of prepetition indenture secured claims are expected to receive a recovery of 19% to 26% through either: all remaining cash and asset sale proceeds, minus the general unsecured creditor priority amount, the first director & officer policy proceeds in an amount equal to $3.02 million, and all proceeds of any prepetition employee payments avoidance actions; or other treatment the debtors or creditor trust decide on.

Holders of general unsecured claims are expected to receive a recovery of 0.7% to 13%, through either: their pro rata share of creditor trust interests, provided that the first distribution up to the GUC priority amount will be distributed pro rata to holders of general unsecured claims other than holders of the prepetition indenture deficiency claims; or other treatment the debtors or creditor trust agree to.

Holders of subordinated claims and interests will receive no nothing under the plan.

The Northbrook, Ill.-based pharmaceutical company filed bankruptcy under Chapter 11 on Sept. 5. The case number is 22-10845.

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