UK chemicals giant Venator files for Chapter 11

BY Fraser Tennant

Following a period of mounting losses, UK-based chemical giant Venator Materials PLC has agreed a recapitalisation plan with its lenders and noteholders as part of a bid to rescue the business.

To be implemented through a pre-packaged Chapter 11 bankruptcy in the US, the plan will equitise nearly all of Venator’s funded debt, strengthen its balance sheet and facilitate an infusion of new capital, which will position the company for future growth and success.

Moreover, the plan will be financed by a debtor-in-possession (DIP) financing facility, which includes a commitment for $275m in new-money financing from the company’s supporting creditors.

Following approval by the court, the DIP financing, together with cash on hand and cash generated from ongoing operations, is expected to provide substantial liquidity to support Venator throughout the recapitalisation process and beyond.

A global manufacturer and marketer of chemical products, Venator’s offerings comprise a broad range of pigments and additives that bring colour and vibrancy to buildings, protect and extend product life and reduce energy consumption. Based in Wynyard, UK, the company employs approximately 2800 associates and sells its products in more than 106 countries.

“We have faced unprecedented economic headwinds, including significantly lower product demand and higher raw material and energy costs in the second half of 2022,” said Simon Turner, president and chief executive of Venator. “The agreement we have reached with our lenders on a recapitalisation plan will significantly reduce Venator’s debt burden and place the company on a sound financial footing, which will enable us to deliver on our strategy and capitalise on future growth opportunities.”

Venator's businesses are expected to continue to operate as normal for the duration of the Chapter 11 process and Venator expects to continue to pay wages and benefits to its global workforce and pay all trade partners.

Throughout the court-supervised bankruptcy process, Venator will remain in possession and control of its assets, as well as retain its existing management team and board of directors.

Venator expects to complete its Chapter 11 process within approximately two months.

Mr Turner concluded: “Venator’s management, alongside our advisers, has worked tirelessly to assess all viable options available to us to ensure the long-term sustainable success of the company.”

News: Venator files for Chapter 11 bankruptcy process as US shares to be delisted

Drugmaker Athenex files for Chapter 11

BY Fraser Tennant

After exploring several options to stay afloat, biopharmaceutical company Athenex, Inc has voluntarily filed for Chapter 11 bankruptcy to divest its assets, while seeking to maximise value for its stakeholders.

The company has also reached agreement with its lenders to move forward with an expedited sales process of its assets across its primary businesses, which is expected to conclude by 1 July 2023, with Chapter 11 cases continuing thereafter to resolve claims.

Athenex has also reached an agreement with its secured lenders, subject to court approval, for the consensual use of cash collateral, which will enable the company to, among other things, satisfy certain obligations to its vendors for authorised goods received and services rendered after the filing.

Founded in 2003, Athenex is a clinical-stage biopharmaceutical company dedicated to becoming a leader in the discovery, development and commercialisation of next-generation cell therapy products for the treatment of cancer.

“Throughout our history, we have sought to become a leader in bringing innovative cancer treatments to the market and improving patient health outcomes,” said Dr Johnson Lau, chief executive of Athenex. “Our team was successful in bringing tirbanibulin, through regulatory approvals, to the US market and a number of European Union (EU) countries, as well as Taiwan.

“Unfortunately, our oral paclitaxel product candidate received a complete response letter from the US Food and Drug Administration, and this significant regulatory setback, coupled with challenging biotech markets and the difficult economic environment, put tremendous pressure on our ability to continue to fund our businesses.”

Over the past two years, Athenex has refocused its business around its NKT cell therapy platform, monetised non-core assets to improve its balance sheet and extended its cash runway, while paying down $108m of debt and undertaking a comprehensive review of strategic alternatives to create value for our stakeholders.

Dr Lau concluded: “We are incredibly thankful to our team for their dedication to Athenex and will look to support our colleagues through this transition period.”

News: Drugmaker Athenex voluntarily files for U.S. Chapter 11 proceedings

Bittrex bankrupt

BY Richard Summerfield

Cryptocurrency exchange Bittrex Inc has filed for Chapter 11 in the US Bankruptcy Court for the District of Delaware, just weeks after the company was accused of operating an unregistered securities exchange by the US Securities and Exchange Commission (SEC).

At the end of April, Seattle-based Bittrex halted its US operations and noted that its international customers, which are served by its global platform based in Liechtenstein, would not be impacted by its US bankruptcy. Bittrex, which was founded in 2014, said it has more than 100,000 US-based creditors. Its estimated liabilities are between $500m and $1bn, according to the court filing. The US Treasury’s Office of Foreign Assets Control (OFAC) emerged as the company’s largest creditor, with a substantial claim exceeding $24m.

In mid-April, the SEC sued Bittrex on allegations it operated a national securities exchange, broker and clearing agency. The SEC also sued former Bittrex chief executive Bill Shihara and Bittrex Global. Oliver Linch, chief executive of Bittrex Global. said last month that the exchange intended to fight the charges in court, but a bankruptcy proceeding may make this more difficult.

“Having previously announced that Bittrex, Inc. would be ceasing all operations in the U.S. effective April 30th, we have now made the decision to file Chapter 11 bankruptcy in federal court in Delaware,” said Bittrex in a statement announcing the bankruptcy filing. “This announcement does not impact Bittrex Global, which will continue operations as normal for its customers outside the U.S.

“For those customers who did not withdraw their funds from the platform prior to the end of April, your funds remain safe and secure, and our main priority is to ensure that our customers are made whole. While the Bankruptcy Court will ultimately decide the method by which those funds can be claimed by and distributed to our customers, we intend to ask the court to activate those accounts as soon as possible so that customers meeting the necessary regulatory requirements will be able to withdraw them,” he added.

In filings made at the Delaware Court, Evan Hengel, the co-chief restructuring officer of Bittrex, said that customers would get a “100 percent like-kind cryptocurrency distribution” under its liquidation plan, enabling them to access the Bittrex platform and withdraw their funds.

News: Crypto exchange Bittrex files for bankruptcy after SEC complaint

Lannett Company files for Chapter 11 bankruptcy

BY Richard Summerfield

Generic drug manufacturer Lannett Company has filed for a prepackaged Chapter 11 bankruptcy in the US Bankruptcy Court for the District of Delaware.

On 1 May, the company announced it had agreed to a restructuring support agreement (RSA) with holders of more than 80 percent of its 7.750 percent senior secured notes and 100 percent of the lenders party to the company’s second lien credit and guaranty agreement. The RSA will see the company seeking to significantly improve its financial position by eliminating approximately $597m of funded debt, including $511m of secured debt, through conversion of the secured debt into equity in the newly reorganised company.

Lannett, founded in 1942, develops, manufactures, packages, markets and distributes generic pharmaceutical products for a wide range of medical indications.

“The significant support of our debtholders and other stakeholders demonstrates their confidence in the Company’s business plan and Lannett’s long-term strategy,” said Tim Crew, chief executive of Lannett. “Commencing our Chapter 11 cases is an important step toward strengthening our financial position, and we intend to move through this process quickly and without disruption for our customers and partners. We believe that implementing these transactions will enable us to continue manufacturing and producing safe, life-enhancing, and affordable generic pharmaceutical medicines.”

The company expects to continue to operate throughout the Chapter 11 process. The RSA and the prepackaged plan provide for vendors, employees and other partners to be paid in the ordinary course of business for obligations incurred prior to and after the commencement of the Chapter 11 cases. Lannett said it had sufficient liquidity to operate its businesses, including the payment of all such obligations. It expects to move through the process seamlessly, emerging as a stronger company better able to build for the future.

In April, Lannett was removed from the New York Stock Exchange (NYSE) after it fell below the continued listing standard requiring listed companies to maintain an average global market capitalisation of at least $15m over a consecutive 30-trading day period.

In December 2022, Lannett announced plans to close two research and development centres in Philadelphia, as well as eliminate 64 jobs, about 11 percent of its workforce. In a filing to the Pennsylvania Department of Labor and Industry, the company said these decisions were made in order “to streamline and realign our operations to ensure the continued progression of our existing pipeline and future growth”. The company said the facilities would be closed by 30 June 2023.

News: Generic Drugmaker Lannett Files for Chapter 11 Bankruptcy

Cineworld files bankruptcy exit plan

BY Richard Summerfield

Cineworld, the London-listed cinema chain, which filed for bankruptcy protection in the US in autumn 2022, has filed a reorganisation plan with a Texas bankruptcy court which will effectively wipe out its existing shareholdings.

The filing with the US Bankruptcy Court for the Southern District of Texas, Houston Division formalises a deal that was first outlined on 3 April, which intends to cut the company’s debt by about $4.53bn and raise $2.26bn in funds to emerge from bankruptcy. The plan does not provide for any recovery for its existing shareholders, the group said.

Cineworld is “seeking to confirm the plan on an expeditious timeline” and reiterated its expectation that it can emerge from the Chapter 11 bankruptcy strictures “during the first half of 2023”. The plan is subject to court approval and Cineworld acknowledges that court approval depends on certain creditor approvals.

“This agreement with our lenders represents a ‘vote-of-confidence’ in our business and significantly advances Cineworld towards achieving its long-term strategy in a changing entertainment environment,” said Mooky Greidinger, chief executive of Cineworld. “With a growing slate of blockbusters and audiences returning to cinemas in increasing numbers, Cineworld is poised to continue offering moviegoers the most immersive cinema experiences and maintain its position as the ‘Best Place to Watch a Movie’.”

In a filing, Cineworld said that its proposal to the court is supported by lenders holding and controlling approximately 83 percent of the group’s term loans due 2025 and 2026 and revolving credit facility due 2023, and approximately 69 percent of the debtors’ outstanding indebtedness under the debtor-in-possession financing facility previously agreed with the court.

Cineworld last week dropped plans to sell its businesses in the US, the UK and Ireland after failing to attract a suitable buyer. The company is seeking to continue to operate its global business and cinemas as usual without interruption. However, the company will “continue to consider the proposals that were received in respect of its ‘rest of the world’ business”.

Cineworld, the second largest cinema operator in the world, also operates the Regal, Cinema City, Picturehouse and Planet cinema brands.

News: Cineworld Expects Exit From Chapter 11 in Next Three Months, Files Formal Reorganization Plan