A bankruptcy judge yesterday cleared cancer-drug maker Dendreon Corp. to pursue a sale in case such a deal yields more money for its creditors than a restructuring led by its bondholders, the Wall Street Journal reported today. Bankruptcy Judge Peter Walsh authorized Dendreon to put itself up for sale at an auction early next year, where bidders will have to offer more than $275 million to have a shot at acquiring the maker of prostate cancer drug Provenge. If no bidders are willing to offer that much, Dendreon hopes to proceed with a restructuring in which unsecured bondholders owed $620 million could trade their debt for equity in the reorganized company. Two large groups of Dendreon’s bondholders agreed to the terms of such a restructuring before the company sought chapter 11 protection last month. Those agreements, however, came under fire yesterday by the U.S. Trustee’s office. U.S. Trustee trial attorney David Buchbinder argued that the restructuring plan support agreements not only propose to treat some creditors better than others but also could provide for the improper payment of the noteholders’ attorneys and advisers.
