PharmaKinetics Laboratories Inc. has asked for more time to file a reorganization plan in U.S. Bankruptcy Court.
The generic drug-testing firm filed for Chapter 11 of the Federal Bankruptcy Act in November. The move was precipitated by Maryland National Bank, which called loans totaling more than $6 million. The original deadline for submitting a restructuring proposal passed late last month.
Joel I. Sher, the attorney representing Baltimore-based PharmaKinetics, said his client's "reorganization is proceeding pretty smoothly." Mr. Sher added that requests for additional time to file reorganization plans are routine in large-scale bankruptcies.
"I think we're going to start actively working on the plan with the bank and the creditors, so I think we'll have a plan on file in the near future," Mr. Sher said. "Actually, we've been working together pretty successfully.
"We're also in the process of negotiating a long-term cash-collateral agreement with MNC [parent of Maryland National Bank], which we hope to have approved by the court later on this week."
PharmaKinetics has an existing cash-collateral agreement with MNC that expires May 31.
According to court papers, PharmaKinetics had more than $26 million in assets and $19.5 million in total liabilities when it filed for bankruptcy. The firm announced a net loss of $764,690, or 8 cents a share, for its second quarter, which ended Dec. 31, 1990. During the same quarter in 1989, the 15-year-old drug-testing company reported a loss
of $362,560, or 4 cents a share.
Phone calls to PharmaKinetics' chief executive officer, V. Brewster Jones, for comment on the company's situation were not returned.
However, Mr. Sher said that "the business is stabilizing and we've kept our customer base and we've actually met or exceeded all performance projections that we had in November."
PharmaKinetics recently appointed Taryn L. Kunkel as its chief financial officer. She replaces Glenn McAvoy, who left to pursue other interests.
The financial pressure placed on PharmaKinetics by Maryland National Bank capped monetary woes that began two years ago when the company was forced to implicate a major customer, Bolar Pharmaceutical Co., in a drug-switching scam. The move cost then-thriving PharmaKinetics about 45 percent of its business.