Molecular Insight disclosure approved; plan confirmation hearing May 5

By Caroline Salls

Pittsburgh, March 23 - Molecular Insight Pharmaceuticals, Inc.'s disclosure statement was approved March 23 by the U.S. Bankruptcy Court for the District of Massachusetts.

The plan confirmation hearing is scheduled for May 5.

Under the first amended plan of reorganization,

• Consenting bondholders and their affiliates will provide $40 million of new capital under a five-year exit commitment. Interest on the exit facility will be 17.5%;

• The company's bonds will be converted into 100% of the new equity in the reorganized Molecular Insight;

• Holders of general unsecured claims will receive their share of $500,000 in cash; and

• Existing equity interests will be cancelled and holders will receive no distribution.

The company will be required to pay a $2 million upfront fee in connection with the exit facility.

In addition, Molecular Insight will pay an exit lender fee in the form of seven-year warrants to purchase shares of the company's series A convertible preferred stock, exercisable for 25% of the reorganized company's common stock, as well as a backstop fee in the form of seven-year warrants to purchase the series A convertible preferred stock exercisable for 6.5% of the reorganized common stock.

The exercise price will be $0.01 per share.

A previously approved 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, 2010. The Chapter 11 case number is 10-23355.

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