Codiak BioSciences secures approval of cash collateral stipulation

By Sarah Lizee

Olympia, Wash., June 12 – Codiak BioSciences, Inc. received approval of a stipulation relating to its access to cash collateral of prepetition secured lenders Hercules Capital, Inc. and its affiliates, according to an order filed Monday with the U.S. Bankruptcy Court for the District of Delaware.

According to the stipulation, the debtors and prepetition secured parties sought to modify the final cash collateral order to provide for additional adequate protection payments to the prepetition secured parties and extend the debtors’ authority to use cash collateral so that the debtors can wind down their affairs.

The company will make a cash payment of $2.6 million and 100% of the cash proceeds of all asset sales and recovery of letter of credit proceeds, provided that (i) the debtors are not required to distribute those proceeds until the amount held at any time is in excess of $100,000 (other than in the case of a final distribution to prepetition secured parties) and (ii) the debtors are authorized to direct third parties to make the payment of any sale or other proceeds directly to the prepetition secured parties.

Prior to approval of the stipulation, the debtors continued to pay 75% of the sale proceeds as adequate assurance under the final order.

Amounts paid as adequate protection representing interest for the month of June and thereafter will not exceed $160,000, and amounts paid as adequate protection representing the fees and expenses of the prepetition secured parties and their professionals to be paid by the debtors incurred in the month of May and thereafter will not exceed $70,000.

The termination date is set for July 31.

Codiak BioSciences is a clinical-stage biopharmaceutical company based in Cambridge, Mass. The company filed bankruptcy on March 27 under Chapter 11 case number 23-10350.

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