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Oscient seeks conversion of Chapter 11 bankruptcy case to Chapter 7
By Lisa Kerner
Charlotte, N.C., March 26 - Oscient Pharmaceuticals Corp. asked the court to convert its Chapter 11 bankruptcy case to Chapter 7, according to a Friday filing with the U.S. Bankruptcy Court for the District of Massachusetts.
A hearing is requested for April 14, when the court will also consider its show cause order.
Oscient is requesting the case conversion because the debtors sold substantially all of their assets in quarters three and four of 2009, have terminated all but one of their employees and have no business operations.
In addition, the debtors admit they do not intend to rehabilitate their affairs and that their sole bankruptcy exit strategy is to distribute the proceeds derived from the sale of their assets to creditors, the filing said.
Administrative and litigation costs due to the dispute between the Oscient official committee of unsecured creditors and the debtors' principal secured creditor, Paul Royalty Fund Holdings II, over the allocation of the sale proceeds are diminishing the estate, Oscient said.
As previously reported, a hearing on a motion by Oscient's official committee of unsecured creditors to terminate the company's exclusivity will also be held on April 14.
The committee asked the court to terminate Oscient's exclusivity in February so the creditor group could file a straightforward liquidating plan.
Oscient wants to extend its exclusive filing period to May 11 from Feb. 10 and the plan vote solicitation period to July 8 from April 9.
Oscient, a Waltham, Mass., commercial-stage pharmaceutical company, filed for bankruptcy on July 13, 2009. Its Chapter 11 case number is 09-16576.
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