Cetero Research‘s unsecured creditors will have a little more time to prepare a bid to buy the bankrupt clinical research organization.
The bankruptcy court has extended the bid deadline for the CRO by 11 days to May 11, Outsourcing Pharma, reported. Unsecured creditors of Cetero last week asked the court for an extension, claiming the May 1 deadline set by Cetero did not give enough time to do the due diligence necessary to submit a bid.
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Cary, North Carolina-based Cetero filed for chapter 11 bankruptcy protection on March 26. The early phase CRO said in the court filings that its bankruptcy filing was prompted by financial constraints on the company after a U.S. Food and Drug Administration inquiry into Cetero’s Houston, Texas site became public. The FDA had alleged that work at that site could be compromised because of falsified clinical research records.
Cetero’s bankruptcy filing outlined a “stalking horse” auction to sell the CRO and its assets. The company’s secured lenders are serving as the stalking horse, the bidder who sets the minimum bid for the auction and has the right to match other offers. According to the court filings, the minimum Cetero bid is $81 million cash and bidders must post an $8.1 million deposit.
The unsecured Cetero creditors had also objected to the secured lenders right to use the amount of Cetero’s debt as part of their bid. This credit bid would add $66 million to the offer of $81 million for a total of $147 million, an amount that is “impossibly high and will chill bids,” the group wrote in the filing. But U.S. bankruptcy law has recognized credit bidding as a right of secured creditors.
