Oscient Pharmaceuticals (OSCI) Files Chapter 11 Bankruptcy; Shares Deemed No Value
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Oscient Pharmaceuticals Corporation (NASDAQ: OSCI) and its wholly owned subsidiary, Guardian II Acquisition Corporation, today each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Massachusetts. Oscient and Guardian will continue to manage and operate their businesses and assets during the pendency of the bankruptcy case, subject to the supervision of the Bankruptcy Court.
In conjunction with the filing, Oscient and Guardian are seeking customary authority from the Bankruptcy Court that will enable them to continue operations and deliver products to customers in the ordinary course of business and without interruption.
In connection with the filing Oscient entered into an agreement with a subsidiary of Cornerstone Therapeutics Inc. for the sale of assets related to FACTIVE. Under the terms of the agreement, Cornerstone will pay Oscient $5 million plus the value of FACTIVE inventory at closing and a royalty on Cornerstone's sales of FACTIVE, less certain adjustments, through the fifth anniversary of the closing date. The sale is subject to customary closing conditions, approval of the Bankruptcy Court and the conduct of a Bankruptcy Court supervised auction process in which Oscient will seek competing bids to achieve the highest price possible for the FACTIVE assets.
Oscient and Guardian are continuing to explore strategic alternatives, including seeking a buyer for the ANTARA product and other assets.
It is Oscient's belief that there will be no value for the common stockholders in the bankruptcy liquidation process. Stockholders of a company in Chapter 11 generally receive value only if all claims of the company's secured and unsecured creditors are fully satisfied. Oscient believes all such claims will not be fully satisfied. [SM]
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