Bankrupt Irish-based pharmaceuticals group Endo International is set to put its assets up for auction with a starting bid of more than $6 billion (€5.5 billion) as part of a court-overseen debt restructuring that is seeing law firms and other advisers in the United States and Dublin share tens of millions of dollars.
Dublin-based law firm A&L Goodbody, which is advising Endo on the restructuring, has billed €3.9 million in total for five months’ work to date, according to filings, with 20 per cent of the amount held back, as it charged rates of up to €590 an hour for senior partners. US law practice Skadden, Arps, Slate, Meagher & Flom, Endo’s main legal adviser on the restructuring, has submitted bills totalling $33.4 million, according to filings. Endo’s operational head office is in the US.
Other Irish law firms involved in the case include William Fry, which is advising an official committee of unsecured Endo creditors and where work will be billed at hourly rates of up to €680; and Maples and Calder (Ireland), representing opioid claimants, which will charge rates of as much as €725 an hour, according to filings. Invoices from each have yet to be disclosed. Arthur Cox and Matheson also have roles in the restructuring.
Endo, the product of a tax-inversion merger deal almost a decade ago and where former Elan chief financial officer Shane Cooke is a non-executive director, filed for chapter 11 bankruptcy protection last August, as it sought to settle thousands of lawsuits over its alleged role in the US’s opioid epidemic.
Parties’ general election manifestos struggle to make the figures add up
On his return to Web Summit, the often outspoken chief executive Paddy Cosgrave is now an epitome of caution
Surviving a shake-up: is restructuring ever good for staff?
The Irish Times Business Person of the Month: Dalton Philips, Greencore
While there had originally been an expectation that the US court-overseen restructuring would need to be rubber-stamped by an Irish examinership through the High Court, legal sources in Dublin said this is now unlikely to be the case, due to the structure of the deal now being pursued.
A&L Goodbody has so far topped the list of disclosed fees to Irish firms from the restructuring, with pages of itemised invoices, spanning work done writing and assessing documents and emails to internal and external calls.
Endo secured US bankruptcy court approval this week to put its assets up for auction with a starting bid – or so-called stalking horse offer – by lenders worth more than $6 billion, clearing a major hurdle in its chapter 11 case.
The go-ahead came in spite of objections from a US government official that monitors chapter 11 cases, known as the US Trustee, and representatives for potential future opioid claimants. They had argued the proposed structure of the lenders’ offer, which is mainly in the form of a credit bid, would stifle other, better offers.
Endo’s lenders earlier this month reached settlements that would provide higher payouts to certain creditor groups in return for their support of the bankrupt opioid manufacturer’s reorganisation. The deals pave the way for Endo to settle mass opioid litigation through the establishment of various trusts.
The proposed settlement sets aside $119 million of cash, payable over two years to private opioid claimants, to resolve allegations that Endo’s painkiller Opana ER, which it discontinued in 2017, fuelled opioid addiction.
The company has denied liability in connection with the opioid epidemic. It previously agreed when it entered chapter 11 to pay roughly $450 million to governmental plaintiffs as part of its bankruptcy-exit plan.
Endo is one of several opioid manufacturers to enter chapter 11 in the last few years after facing claims the companies profited from the opioid crisis.
Mallinckrodt, another Dublin-based but US-run drugmaker, filed for bankruptcy in the US in late 2020 after being overwhelmed by opioid claims. It entered examinership last year to copperfasten a debt restructuring hammered out on the other side of the Atlantic. – Additional reporting: Bloomberg
