Item 8.01 Other Events.
On April 8, 2020, Aradigm Corporation (the "Company") filed with the Bankruptcy
Court its Combined Chapter 11 Plan and Disclosure Statement (the "Combined
Plan"). As described in the Form 8K filed by the Company on April 3, 2020, the
Company sold its assets and intellectual property that pertain to Lipoquin, Free
Ciprofloxacin, Apulmiq and any derivatives thereof for cash, the right to
receive milestone payments on the occurrence of certain events and the right to
receive royalty payments based on future sales of the product. The Combined Plan
provides that on the Effective Date of the Combined Plan these assets, as well
as the Company's other assets, will be contributed to a liquidating trust for
the benefit of the Company's creditors and shareholders. The Company's stock
will be cancelled and creditors and shareholders will receive a pro rata
interest in the liquidating trust. The liquidating trust will satisfy the claims
of the Company's priority creditors and will collect any milestone payments and
royalty payments that are earned and distribute the proceeds to the Company's
creditors. After creditors are paid in full with interest, the liquidating trust
will distribute any remaining proceeds that are received to the Company's
shareholders.
The Combined Plan is subject to the vote of creditors and shareholders and is
further subject to the approval of the Bankruptcy Court. The Bankruptcy Court
has scheduled a hearing for April 22, 2020 to consider whether to grant
tentative approval of the Combined Plan as providing adequate information as
provided in 11 U.S.C. § 1125.
The Combined Plan is on file with the Bankruptcy Court. This description of the
Combined Plan is qualified in its entirety by the terms of the Combined Plan.
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