Molecular Insight: BioMedica objects to plan support agreement filing

By Lisa Kerner

Charlotte, N.C., March 14 - Molecular Insight Pharmaceuticals, Inc.'s request for court approval for its plan support agreement and exit financing may be stalled as BioMedica Life Sciences, SA filed an objection to the request for approval, according to a Monday filing with the U.S. Bankruptcy Court for the District of Massachusetts.

A hearing on the plan support agreement is scheduled for March 16.

As previously reported, Molecular Insight secured the agreement and exit financing from some of its bondholders and as a result, made changes to its previous plan of reorganization, which had been based on a $45 million cash infusion from Savitr Capital LLC.

The original plan and disclosure statement identified BioMedica as a unique class of creditor. BioMedica previously filed a proof of claim against the debtor in the amount of $9,797,614 related to the debtor's breach of a licensing agreement and supply agreement, the filing said.

Molecular Insight said previously the bondholders indicated that they would object to the original plan and submitted a proposal for an alternate transaction to be implemented through an agreed plan and financing.

The company's board of directors chose the bondholder plan as the superior proposal.

Molecular Insight's debt would be reduced by $162 million and it will benefit from a $40 million new capital infusion under the plan.

The senior secured floating-rate bondholders have also committed to provide $10 million in debtor-in-possession financing.

The DIP facility will mature on the earliest of May 15, the effective date of the plan of reorganization, the sale of substantially all company assets and the conversion of Molecular Insight's bankruptcy case.

Interest will be 17.5%.

Molecular Insight terminated its investment agreement with Savitr, effective March 2, which entitles Savitr to a $150,000 breakup fee and reimbursement of $490,000 of its related expenses.

The bondholders' support agreement requires the plan to take effect by May 16.

Molecular Insight, a Cambridge, Mass.-based clinical-stage biopharmaceutical company focused on molecular medicine, filed for bankruptcy on Dec. 9. The Chapter 11 case number is 10-23355.

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