Angiotech Pharmaceuticals will file for bankruptcy to reduce its $250 million debt, consisting of 7.75% senior subordinated notes, RTT News reports. The specialty pharmaceutical and medical device maker has received a $25 million debtor-in-possession loan from Wells Fargo Capital Finance to continue operations while under creditor protection.

As per the agreement, Angiotech will also pay $6 million to former shareholders of Quill Medical to settle a lawsuit filed in October 2010. The noteholders will exchange their subordinated notes to receive 96% of the reorganized company’s common stock, adds Reuters.

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