Biopharmaceutical Company Restructuring

Background

The decision to file Chapter 11 Bankruptcy can be painstaking in itself, and the navigation through bankruptcy and out the other side is a journey best taken with a trusted partner who can help guide the business back to success. The client in this success story was a publicly held, clinical stage, life science biopharmaceutical company. Their focus was on the discovery, development, and commercialization of radiopharmaceutical products for use in diagnostic imaging and treatments in oncology.

Situation

The company was highly leveraged after selling $150 million in five-year, senior-secured bonds. The indenture contained various covenants, including a minimum liquidity requirement. Late in year two, it became clear that maintaining the liquidity requirement was unlikely and that the covenant would be violated in the coming months.

An E.L.I. Partner, working with outside counsel, the board, and management developed and evaluated a series of strategies to best address the situation. And, in the end, reorganization under Chapter 11 Bankruptcy was pursued.

Solution

The E.L.I. Partner, working with management, prepared the company for a bankruptcy filing under Chapter 11 of Title 11 of the U.S. Code. The E.L.I. Partner provided due diligence support to secure waivers from bonds holders prior to filing. Upon voluntary filing for protection, the E.L.I. Partner provided the court with required periodic filings and documentation supporting the Joint Plan of Reorganization. The E.L.I. Partner further worked with bondholders, creditors, and shareholders in validating claims. Upon emerging from bankruptcy, the E.L.I. Partner administered the payment of claims and restructuring expenses and directed fresh-start reporting.

Results

The Client successfully emerged from Chapter 11 as a privately held entity and successfully secured $40 million in exit financing.