SeraCare wins court OK for vote on plan to exit bankruptcy
SeraCare Life Sciences Inc., a maker of medical supplies, has won court approval to send its shareholder-backed bankruptcy plan to creditors for a vote.
Judge Louise DeCarl Adler of US Bankruptcy Court in San Diego last week signed off on the company's disclosure statement, which outlines its plan to exit Chapter 11 through a rights offering to existing shareholders.
A group of shareholders, led by hedge fund Harbinger Capital Partners, has agreed to backstop a $20.2 million rights offering that would finance the company's bankruptcy exit. The group holds over 30 percent of SeraCare's common stock.
Shareholders, last in line for repayment in a Chapter 11 case, will get one share in the reorganized company for each share they own, along with the right to participate in the rights offering, which will offer shares at $4.75 each. Options and warrants will be reinstated after SeraCare emerges from bankruptcy.
Harbinger will also buy SeraCare's bank debt and allow it to use the cash collateral securing the debt without paying default interest through June 2007.
Votes on SeraCare's reorganization plan are due Jan. 31. The judge scheduled a confirmation hearing on the plan for Feb. 15.
The company reached a deal with the shareholders after scrapping a management-backed plan to issue $25 million in unsecured notes ultimately convertible into common stock at $5.50 a share.
Under the terms of the proposed Chapter 11 plan, SeraCare will pay all of its debt, including settlements with the government and with shareholders stemming from securities-fraud claims, in full.
The Securities and Exchange Commission and the Justice Department have been investigating SeraCare, which on March 15 announced it would restate its financial results for the first three quarters of 2005. SeraCare's chairman, chief executive, and financial chief were fired in March. Its stock was subsequently delisted from trading on Nasdaq and is now traded over the counter.
The company was formerly headquartered in Oceanside, Calif., but has moved to West Bridgewater.
(Dow Jones/AP)
