Codiak BioSciences asks court to dismiss Chapter 11 bankruptcy case

By Sarah Lizee

Olympia, Wash., June 7 – Codiak BioSciences, Inc. asked the U.S. Bankruptcy Court for the District of Delaware to dismiss its Chapter 11 bankruptcy case in a motion filed Tuesday.

The court entered various orders over the past week approving separate asset sales to Lonza Houston, Inc., Evox Therapeutics, Ltd. and Astellas Institute for Regenerative Medicine, approving the assumption and assignment of a lease to Lonza, and approving a settlement that authorized the termination and rejection of the lease for the debtors’ corporate headquarters.

The debtors anticipate that each of the sales will close within the coming days and that they will have funds to pay all administrative claims in the updated budget.

However, the proceeds of the sales will not be sufficient to repay in full prepetition secured debt, and there will be no distribution to holders of general unsecured claims, the company said.

Codiak said that with the consent of the prepetition secured parties, it will have access to sufficient cash collateral to complete the wind down of its corporate affairs.

“The debtors have explored various options to bring these Chapter 11 cases to a conclusion and believe, after making appropriate considerations, that a dismissal of these Chapter 11 cases is the most expeditious and cost-effective mechanism to wind down the debtors’ affairs,” the company said in the motion.

The company said a dismissal would not negatively impact creditors as compared to conversion to Chapter 7 because there are no remaining assets of any material value that could be sold and made available for distribution to unsecured creditors, and the prepetition secured parties, who have liens on all of the debtors’ assets, will be exiting these Chapter 11 cases without having been paid in full.

The debtors also do not have sufficient funds to propose a confirmable Chapter 11 plan and have no assets to restructure through a plan, Codiak said.

A hearing is scheduled for June 27.

Codiak BioSciences is a clinical-stage biopharmaceutical company based in Cambridge, Mass. The company filed bankruptcy on March 27 under Chapter 11 case number 23-10350.

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