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Protea Bankruptcy Objection Filed

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Protea Biosciences Group’s official committee of unsecured creditors filed with the U.S. Bankruptcy Court an objection to the Debtors’ emergency settlement motion between the Debtors and Azurrx Biopharma.

The committee asserts, “The Committee has not had the opportunity to fully review and discuss the Settlement Motion with the Debtors and their counsel. The Debtors’ Settlement Motion fails to identify and provide information relative to any dispute, or all issues, that are being resolved in conjunction with the Settlement Motion. Other than stating that it is uncertain whether the future contingent interest in royalties from AzurRx’s will mature and become noncontingent, the Debtors do not identify any dispute, claim and/or cause of action that it seeks to compromise under Rule 9019 with respect to the Sale Agreement and AzurRx’s and the Debtors’ rights and obligations thereunder. Based upon a fair reading of the Settlement Motion, it appears to the Committee that the Debtors desire to ‘cash out’ the contingent future interest in royalties and sell the same to AzurRx rather than settling disputes under the Sale Agreement.”

In addition, “The Committee’s interpretation is supported by the Debtors own statements in paragraph 9 of the Settlement Motion wherein the Debtors assert that they previously marketed their future contingent interest in the royalties but were unable to locate a buyer that was ready, willing and able to purchase the interest for more than is currently offered by AzurRx….Regardless of whether the relief requested in the Settlement Motion would have been more properly brought as a sale motion pursuant to Section 363 of the Bankruptcy Code, the Debtors fail to provide any information on the value of their interest in the future royalties and why this settlement/sale is in the best interests of creditors and the Debtors’ estates. Further, other than stating that AzurRx’s agreement to enter into the Settlement Agreement is contingent upon consummation of the transaction on or before December 31, 2017, the Debtors offer no other basis as to why approval of the Settlement Agreement/sale must occur on an emergency basis.”

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