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PhaseBio Pharmaceuticals Inc. has received final approval from the United States Bankruptcy Court for its Chapter 11 bankruptcy plan, according to a recent SEC filing. The plan outlines the liquidation of assets and the winding down of operations through a Liquidation Trust.
The Malvern, Pennsylvania-based company, which focuses on pharmaceutical preparations, had previously filed for bankruptcy on October 23, 2022. On June 26, 2024, the court confirmed the bankruptcy plan, which includes provisions for the distribution of assets to claim holders.
Under the approved plan, holders of priority non-tax claims and secured claims will be paid in full, while general unsecured creditors are anticipated to receive a recovery of approximately 1.6% on their claims. This recovery does not account for any potential additional distributions from the Liquidation Trustee's efforts or the possible sale of the Bentracimab Royalty.
Equity interest holders are not expected to receive any recovery unless general unsecured claims are paid in full, which, based on the company's financial projections, is unlikely. Approximately 50.2 million shares of PhaseBio's common stock will be terminated and cancelled as of the effective date of the plan.
The company's most recent monthly operating report, for the month ending May 31, 2024, listed total assets of approximately $2.7 million and total liabilities of around $41.9 million.
PhaseBio has cautioned investors against placing undue reliance on the monthly operating reports and against speculative trading in the company's securities. The reports, filed for compliance with the Bankruptcy Court, are not prepared in accordance with GAAP and may be subject to future adjustments.
The confirmation of the bankruptcy plan marks a significant step in PhaseBio's Chapter 11 case, as the company moves towards liquidation and cessation of operations. This information is based on a press release statement.
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