Commonwealth Biotechnologies Exits From Chapter 11
Commonwealth Biotechnologies said that its Plan of Reorganization from Chapter 11 bankruptcy proceedings has become effective April 15, 2013.
Pursuant to such plan, CBI is currently in the process of finalizing definitive documentation with HedgePath, a drug development company focused on cancer therapies, pursuant to which HedgePath will contribute the intellectual property assets relating to its business to CBI in exchange for a new class of preferred stock representing 90% of the outstanding voting stock of CBI on a fully-diluted basis. When the transaction is consummated, CBI’s current shareholders will retain a 10% equity interest in the new entity and will retain one seat on the Board of Directors of CBI, which is expected to be renamed HedgePath Pharmaceuticals.
CBI is extremely pleased to announce its exit from Chapter 11 bankruptcy. This process has been a long and sometimes difficult one but, in the end, we are very pleased that all legitimate creditors have been 100% satisfied and, as importantly, equity holders have retained significant value in the exciting new opportunity afforded by our transaction with HedgePath, said Richard J. Freer, CEO of CBI. It is important to note that it is not at all typical that equity holders survive a bankruptcy proceeding. More often, equity, being the last constituency of interest, is wiped out. However, with the support of a highly skilled legal team and the hard work of the Executive Committee of the Board, we were able to preserve significant assets and find a great new partner to breathe life back into the company, he added.
On January 20, 2011, CBI filed for Chapter 11 bankruptcy protection. Subsequently, CBI divested its Australian operating entity, Mimotopes, Pty, Ltd and sold its real property holdings in Chesterfield County, Virginia. On March 29, 2013, the U.S. Bankruptcy Court, Eastern District of Virginia, Richmond Division, entered an order confirming the company’s Plan of Reorganization. The Plan, which was effective April 15, 2013, included the contribution of certain assets of HedgePath, LLC to CBI with CBI equity holders retaining a 10% equity interest in the new entity.
HedgePath is a drug development company which is developing anti-cancer applications for the FDA approved antifungal pharmaceutical itraconazole.