The efforts to find a new owner for Cetero Research don't look to be going as smoothly as the troubled CRO may want. This week, a 10-day extension was issued by a Delaware bankruptcy court so that unsecured creditors can submit their own purchase bid, after they argued that the original May 1 deadline didn't offer enough time to prepare one.
Last month, Cetero, based in Cary, NC, filed for Chapter 11 bankruptcy protection, with hopes that the 12 banks that are secured lenders could place a stalking horse bid that would be used as a starting offer for outside bidders to compete with in auction. According to court records, the unsecured creditors issued an objection April 13 claiming the bidding procedure favored the secured lenders and didn't give them enough time to prepare one of their own. The court upheld the objection and postponed the deadline to May 11.
"As more fully discussed herein, the Bid Procedures are seriously flawed, and in numerous respects will serve to chill rather than enhance a competitive bidding process," the objection filing reads.
As MedCity News points out, the current minimum bid for Cetero's purchase is $81 million cash, with an $8.1 million deposit. But with the option to include Cetero's debt in the bid, it could balloon up to $147 million, which the unsecured creditors believe is too high.
When Cetero went public with the protection filing, the company asserted it was back on track. It secured three new research projects, had a positive cash flow and verified more than 1,300 previously unconfirmed reports from its Houston lab that left the FDA seething last year. New ownership was something Cetero looked forward to, as one executive told FierceCRO last month.
- read the article from MedCity News
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