PharmaKinetics Laboratories Inc., a city-based pharmaceuticals-testing and consulting company, formally filed for bankruptcy reorganization yesterday under Chapter 11 of the U.S. Bankruptcy Code. The filing occurred at U.S. Bankruptcy Court in Baltimore.
The 14-year-old company announced last week that it would be seeking Chapter 11 protection from its creditors. According to court papers, PharmaKinetics had total assets of just over $26 million onJune 30, compared with total liabilities of $19.5 million.
The firm's largest secured creditor is Maryland National Bank, said bankruptcy attorney Joel I. Sher, who is handling the bankruptcy filing.
PharmaKinetics' management team decided to look into Chapter 11 after "a calling of loans by Maryland National Bank," Mr. Sher said. "There's many other factors, but that was the immediate precipitating factor." The bank is owed at least $3.6 million on an industrial revenue bond, $2 million on a term loan and $350,000 on a revolving line of credit, Mr. Sher said.
The drug-testing company's largest unsecured creditor is the city of Baltimore, according to court papers, which indicated that the Bureau of Treasury Management Collection Division was owed $382,100. The Baltimore law firm of Weinberg and Green is seeking to recoup $48,000, making it the seventh-largest unsecured creditor. PharmaKinetics' bankruptcy filing listed more than 200 companies owed money.
Mr. Sher said his client had 120 days to file a reorganization plan, and he added that a plan would definitely be ready within that time frame. "In the next 60 to 90 days, we'll be working intensively to put together a package for our investors," he said. "Our board of directors is committed to paying all of the creditors in full."
The company's stock closed at 18.75 cents in over-the-counter trading yesterday.
PharmaKinetics' employs 125 people, and its headquarters is at 300 W. Fayette St. It wasn't clear yesterday if layoffs were being considered as a cost-cutting option.