K-V Pharmaceutical Secures Commitment for $85 Million Loan, Reaches
Agreement with Senior Noteholders on Principal Terms of Plan of
Reorganization
ST. LOUIS, Dec. 12, 2012 /PRNewswire/ -- K-V Pharmaceutical
Company ("K-V" or "the Company") today announced that it has
received a commitment from lenders led by an affiliate of Silver
Point Finance LLC for $85 million in
senior secured post-petition debtor-in-possession ("DIP")
financing, which the Company intends to use to, among other things,
satisfy the terms of its recently filed settlement agreement with
Hologic, Inc. ("Hologic Settlement"), provide additional financial
flexibility during the pendency of the Company's Chapter 11
proceeding and fund certain payments under a proposed
reorganization plan. The new DIP financing, the Hologic
Settlement and the reorganization plan (and related disclosure
statement) are each subject to approval of the U. S.
Bankruptcy Court for the Southern District of New York, the Honorable Judge Allan L. Gropper presiding.
The Hologic Settlement confirms K-V's continued ownership of
Makena® and will resolve all bankruptcy related disputes between
K-V and Hologic, and provides for mutual releases of all claims
between the parties.
Under the proposed reorganization plan, K-V expects to emerge
from Chapter 11 with its entire product portfolio, including
Makena®, Clindesse®, Gynazole-1® and Evamist®. The Company
has provided and is committed to continue to provide its women's
health care products without interruption to meet the needs of the
health care providers and patients it serves.
Prior to the funding of the DIP financing facility, K-V intends
to file with the Bankruptcy Court a proposed reorganization plan, a
related disclosure statement, and a plan support agreement (PSA)
with an ad hoc group of senior secured noteholders. The
principal terms of the proposed reorganization plan are contained
in a plan term sheet filed with the motion to approve the DIP
financing filed with the Bankruptcy Court, which together with
other documents from the Chapter 11 cases, can be found at
http://dm.epiq11.com/KVD.
K-V and certain of its affiliates commenced cases to reorganize
under Chapter 11 of the U.S. Bankruptcy Code on August 4, 2012. The Chapter 11 cases are being
jointly administered under case number 12-13346.
The DIP Lenders consist of affiliates or funds of each of Silver
Point Finance, LLC, Whitebox Advisors, LLC, and Pioneer Investment
Management, Inc.
Willkie Farr & Gallagher LLP
serves as bankruptcy counsel to K-V, and Jefferies & Co., Inc.
as financial advisor and investment banker.
Updates and additional information can be found at the Company's
website www.kvph.com. In addition, the Company's Claims
Administrator, Epiq Bankruptcy Solutions, Inc., maintains a
web-based resource where documents from the Chapter 11 cases,
including the Company's Petitions, can be found,
http://dm.epiq11.com/KVD.
About K-V Pharmaceutical Company
K-V Pharmaceutical
Company is a specialty branded pharmaceutical company with a
primary focus in the area of women's healthcare. As such, we are
committed to advancing the health of women across all the stages of
their lives.
For further information about K-V Pharmaceutical Company, please
visit the Company's corporate website at www.kvph.com.
Cautionary Note Regarding Forward-Looking
Statements
This release contains various forward-looking
statements within the meaning of the United States Private
Securities Litigation Reform Act of 1995 (the "PSLRA") and which
may be based on or include assumptions concerning our operations,
future results and prospects. Such statements may be identified by
the use of words like "plan," "expect," "aim," "believe,"
"project," "anticipate," "commit," "intend," "estimate," "will,"
"should," "could," "potential" and other expressions that indicate
future events and trends.
All statements that address expectations or projections about
the future, including, without limitation, statements about product
launches, governmental and regulatory actions and proceedings,
market position, revenues, expenditures and the impact of recalls
and suspensions of shipments on revenues, adjustments to the
financial statements, the filing of amended filings with the
Securities and Exchange Commission ("SEC") and other financial
results, are forward-looking statements.
All forward-looking statements are based on current expectations
and are subject to risk and uncertainties. In connection with the
PSLRA's "safe harbor" provisions, we provide the following
cautionary statements identifying important economic, competitive,
political, regulatory and technological factors, among others, that
could cause actual results or events to differ materially from
those set forth or implied by the forward-looking statements and
related assumptions. Such factors include (but are not limited to):
(1) the ability of the Company and its subsidiaries to continue as
a going concern; (2) the risk that the Bankruptcy Court will not
approve the Hologic Settlement; (3) the risk that the Bankruptcy
Court will not approve the Company's entry into the currently
proposed DIP financing facility, which is required to fund the
Hologic Settlement ; (4) the ability of the Company and its
subsidiaries to obtain Bankruptcy Court approval with respect to
other motions in the Chapter 11 cases; (5) the ability of the
Company and its subsidiaries to prosecute, develop and consummate
one or more plans of reorganization with respect to the Chapter 11
cases; (6) the effects of the bankruptcy filing on the Company and
its subsidiaries and the interests of various creditors, equity
holders and other constituents; (7) the effects of rulings of the
Bankruptcy Court in the Chapter 11 cases and the outcome of the
cases in general; (8) the length of time the Company and its
subsidiaries will operate under the Chapter 11 cases; (9) risks
associated with third-party motions in the Chapter 11 cases, which
may interfere with the ability of the Company and its subsidiaries
to develop one or more plans of reorganization and consummate such
plans once they are developed; (10) the potential adverse effects
of the Chapter 11 proceedings on the Company's liquidity or results
of operations; (11) the ability to execute the Company's business
and restructuring plans; (12) increased legal costs related to the
Company's bankruptcy filing and other litigation; (13) that its
Class A Common Stock and Class B Common Stock will be, or will
continue to be, traded on the OTCQB Marketplace and whether
sufficient volumes and liquidity will develop; and (14) the ability
of the Company and its subsidiaries to maintain contracts that are
critical to their operation, including to obtain and maintain
normal terms with their vendors, customers and service providers
and to retain key executives, managers and employees.
This discussion is not exhaustive, but is designed to highlight
important factors that may impact our forward-looking
statements.
Because the factors referred to above, as well as the statements
included in Part I, Item 1A—"Risk Factors," of our Annual Report on
Form 10-K for the fiscal year ended March
31, 2012 and under the heading "Risk Factors" in our
Registration Statement on Form S-1 filed with the Securities and
Exchange Commission on July 31, 2012,
could cause actual results or outcomes to differ materially from
those expressed in any forward-looking statements made by us or on
our behalf, you should not place undue reliance on any
forward-looking statements. All forward-looking statements
attributable to us are expressly qualified in their entirety by the
cautionary statements in this "Cautionary Note Regarding
Forward-Looking Statements" and the risk factors that are included
under Part I, Item 1A of our Annual Report on Form 10-K for the
fiscal year ended March 31, 2012 and
under the heading "Risk Factors" in our Registration Statement on
Form S-1 filed with the Securities and Exchange Commission on
July 31, 2012. Further, any
forward-looking statement speaks only as of the date on which it is
made and we are under no obligation to update any of the
forward-looking statements after the date of this release. New
factors emerge from time to time, and it is not possible for us to
predict which factors will arise, when they will arise and/or their
effects. In addition, we cannot assess the impact of each factor on
our future business or financial condition or the extent to which
any factor, or combination of factors, may cause actual results to
differ materially from those contained in any forward-looking
statements.
SOURCE K-V Pharmaceutical Company