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Zymergen’s creditors committee questions fairness of bid procedures
By Sarah Lizee
Olympia, Wash., Nov. 10 – Zymergen Inc.’s official committee of unsecured creditors filed an objection to the company’s proposed bid procedures, according to documents filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.
The group said unsecured creditors are the fulcrum class, with no debtor-in-possession loan and no secured debt applicable to the case.
“Every dollar spent in this case will come out of unsecured creditors’ pockets; every dollar earned will benefit unsecured creditors,” the committee said in the objection.
The group also said it expects that there will be meaningful unsecured creditor recoveries.
Ginkgo, the current owner of the debtors, is the proposed stalking horse bidder. And, 90 of the debtors’ 101 employees are already working for Ginkgo, the committee said.
“This context has demanded a heightened role for the committee,” the group said.
The committee said that since its formation on Oct. 13, it has been focused on ensuring that the debtors did not prematurely sell or release estate causes of action (particularly causes of action against insider Ginkgo), and that the marketing process was fair and open to third parties.
The committee has also started its investigation into estate causes of action, including against Ginkgo.
“This investigation already has revealed colorable claims,” the committee said.
The debtors delayed the bid procedures hearing by a week to provide Ginkgo with an opportunity to revise its bid to address the committee’s concerns about fairness and the value of a Ginkgo release.
The committee said it believes that settlement discussions with the debtors and Ginkgo may ultimately lead to consensus, but the outcome isn’t certain.
The Emeryville, Calif.-based biotech company filed bankruptcy on Oct. 3 under Chapter 11 case number 23-11661.
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