SeraCare asks court to push back financing procedures, hearing

By Jennifer Lanning Drey

Portland, Ore., Oct. 19 - SeraCare Life Sciences Inc. asked the U.S. Bankruptcy Court for the Southern District of California Thursday to once again push back the dates and deadlines for counterbids, objections, auctions and hearings on the company's motion for approval of unsecured financing.

The company said that although substantial progress has been made, the due diligence process has not been completed.

SeraCare wants to reschedule the auction for Nov. 16 from Nov. 6 and the hearing on the financing for a date to be determined from Nov. 8, according to the motion.

SeraCare previously requested and received court approval to adjourn dates and deadlines originally set forth by the court.

On Sept. 29, SeraCare's ad hoc committee of equity security holders objected to the company's proposed up to $25 million unsecured debtor-in-possession financing from Allegient Investors.

In the objection, the committee said the financing will significantly dilute current stockholders and give a massive windfall to outside investors.

According to the objection, the company is asking the court to authorize the immediate issuance of $15 million of tranche A notes, plus another $10 million by the plan confirmation date to pay off its current bank debt. The investor group would receive the notes in exchange for the loan.

Under the terms of the tranche A notes, Allegiant Investors would have the ability to veto the plan reorganization process because any plan proposed by SeraCare must include the provisions of the loan, and any other plan must pay the investors at a make-whole premium that is undefined, the committee said in the filing.

The Allegiant Investors would also be able to appoint one person to the board of directors without election by stockholders under the terms of the notes, according to the objection.

SeraCare, an Oceanside, Calif., manufacturer and provider of biological products and services to diagnostic, therapeutic, drug discovery and research organizations, filed for bankruptcy on March 22, 2006. Its Chapter 11 case number is 06-00510.

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