It gives the company perhaps its only leverage — in negotiations with its lenders, as the lenders would likely also be largely wiped out in any return to the tank. But it is a certainty that all the still outstanding common stock (and all issuable under options, warrants or other future contractual rights) would be worth a tenth of a cent — or less — in that scenario.
Here is the official disclosure filed tonight (at page 34) — and the company did so (IMHO) to allow a weekend for the market participants to thoughtfully-absorb its import:
…If we are unable to reach a satisfactory agreement with our Term Loan Lenders our board of directors has authorized us to begin preparing the company to file a second bankruptcy petition. Given our lack of liquidity, it is reasonably likely that any such filing would result in a complete loss of value for our unsecured creditors and holders of our common stock….
Simply delusional. Citations to civil securities and civil bankruptcy litigation records available upon request — to prove it all.
I won’t offer any opinion on the new strategy announced in the Form 10-Q, other than to say… there is one small consolation — if the company survives, it may well go after Savant and others (in litigation) for their various alleged breaches and infringements of the KaloBios (now Humanigen) IP related to the benz program.
Be excellent to one another. I’m out for a bit.