Zymergen: U.S. trustee takes issue with bid protection for parent

By Sarah Lizee

Olympia, Wash., Oct. 25 – Zymergen Inc.’s motion seeking approval of bid procedures for its assets drew a limited objection from Regions 3 and 9 U.S. trustee Andrew R. Vara, according to documents filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

The motion seeks to award 100% parent company Ginkgo Bioworks Holdings, Inc., which has made a stalking horse cash bid of $5 million, a bid protection of up to $250,000, or 5% of the stalking horse cash purchase price.

Vara said administrative expenses, such as bid protections, can’t be awarded without a record sufficiently demonstrating an actual benefit to the estate.

“It is unclear why a 100% parent company which acquired the debtors in a merger about a year ago needs any inducement to bid for the assets of its subsidiary,” Vara said in the objection.

“Nor is it clear that the parent company will fully earn any bid protection, because the proposed bid procedures allow the parent company to walk away without serving as a backup bidder if it loses at auction.”

The Emeryville, Calif.-based biotech company filed bankruptcy on Oct. 3 under Chapter 11 case number 23-11661.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.