Genta, Inc (fka GNTAQ)

[nutriman24]

16530124\2 00601.0823.000/326111.000
05/29/2013
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
GENTA INCORPORATED,
Debtor.
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Chapter 7
Case No. 12-12269 (KG)
Hearing Date: To be assigned by the Court
Objection Date: June 20, 2103 at 4:00 p.m.
TRUSTEE'S THIRD MOTION FOR ENTRY OF ORDER FURTHER E
XTENDING
TIME TO ASSUME OR REJECT EXECUTORY CONTRACTS AND UN
EXPIRED
LEASES OF PERSONAL PROPERTY PURSUANT TO 11 U.S.C. §
365(d)(1)
George L. Miller, as chapter 7 trustee (the “Truste
e”) for the estate of Genta Incorporated
(the “Estate” of the “Debtor”),by and through his u
ndersigned counsel, requests entry of an order
further extending the time to assume or reject exec
utory contracts and unexpired leases of
personal property pursuant to 11 U.S.C. §365(d)(1),
and states in support:
Jurisdiction, Core Nature, and Venue
1.
The United States Bankruptcy Court for the District
of Delaware (the “Court”)
has jurisdiction to consider this Motion pursuant t
o 28 U.S.C. §1334. This is a core proceeding
pursuant to 28 U.S.C. §157(b). Venue is proper pur
suant to 28 U.S.C. §1409.
Background
2.
On August 3, 2012 (the “Petition Date”), the Debtor
filed a voluntary petition for
relief under chapter 7 of the Bankruptcy Code with
the Court. On or shortly after that date, the
Trustee was appointed.
3.
On September 7, 2012, the Trustee held and conclude
d the meeting of creditors
pursuant to 11 U.S.C. §341.
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4.
The Debtor is a biopharmaceutical company focused o
n the identification,
development, and commercialization of drugs related
to certain conditions associated with
cancer. The Debtor’s products include Ganite, a dr
ug used for treating the cancer-related loss of
bone calcium, as well as two drugs presently in the
development pipeline – Tesetaxel and Oral
Gallium.
5.
Oral Gallium is an investigational agent which unde
rwent phase 1 testing to
evaluate safety and efficacy in the treatment of va
rious conditions associated with bone loss.
Tesetaxel is an investigational anticancer agent wh
ich underwent phase 2 testing to evaluate its
safety and efficacy for treating various forms of c
ancer, including gastric, breast, and prostate.
6.
The Trustee is evaluating a potential sale of subst
antially all of the Estate’s assets,
and intends to file a motion in the near future see
king authority to carry out the sale and
implement related procedures.
7.
The Estate, as successor to the Debtor, is party to
numerous executory contracts
1
and/or unexpired leases of personal property (toget
her, the “Contracts”). Some of the Contracts
may be valuable and/or integral to the Debtor’s bus
iness. Consequently, the Trustee may wish to
preserve them for inclusion in the sale, in order t
o maximize the value of the Estate’s assets.
8.
On November 28, 2012, the Court entered an order ex
tending by one-hundred
twenty (120) days the Trustee’s time period for ass
uming or rejecting executory contracts and
unexpired leases of personal property pursuant to 1
1 U.S.C. §365(d)(1). As extended, this time
period ran through and including January 30, 2013.
1
Nothing in this Motion shall constitute an admissi
on that any particular agreement to which the Estat
e may be a
party constitutes an executory contract for purpose
s of 11 U.S.C. §365.
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9.
On March 6, 2013, the Court entered an order furthe
r extending by one-hundred
twenty (120) days the Trustee’s time period for ass
uming or rejecting executory contracts and
unexpired leases of personal property pursuant to 1
1 U.S.C. §365(d)(1). As extended, this time
period now runs through and including May 30, 2013.
10.
The Trustee retained MTS Health Partners LP as fina
ncial advisor to assist with
marketing and proceeding with a sale or series of s
ales of the Debtor’s products and technology.
The Trustee and his professionals are in the proces
s of reviewing and analyzing the Contracts,
and communicating with interested parties regarding
which Contracts they may wish to assume
in connection with a potential asset purchase. Due
to the highly specialized and complex nature
of the Debtor’s business, as well as the fact that
the Trustee is continuing to market the Estate’s
assets, the Trustee is not yet in a position to mak
e a final decision regarding which of the
Contracts he wishes to maintain in force.
11.
In order to preserve the value of the Estate’s asse
ts, the Trustee wishes to ensure
that no potentially valuable Contract becomes rejec
ted by operation of law. Numerous parties
have expressed a current continuing interest to the
Trustee and to MTS Health Partners LP in
acquiring various of the Debtor’s assets and the Tr
ustee intends to move forward with a proposed
sale once marketing and diligence efforts are concl
uded. The Trustee has specifically identified
a buyer for the Ganite product line and the buyer i
s currently completing due diligence to enable
a motion for sale approval to be filed. Consequen
tly, in the exercise of his business judgment,
the Trustee has determined that he should seek a fu
rther extension of the section 365(d)(1)
deadline for all of the Contracts.
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Summary of Relief Requested
12.
The Trustee requests entry of an order further exte
nding the time period for him to
assume or reject the Contracts by one-hundred twent
y (120) days, without prejudice to his ability
to seek any further extensions.
Applicable Authority
13.
11 U.S.C. §365(d)(1) states:
In a case under chapter 7 of this title, if the tru
stee does not assume or
reject an executory contract or unexpired lease of
residential real property or of
personal property of the debtor within 60 days afte
r the order for relief, or within
such additional time as the court, for cause, withi
n such 60-day period, fixes, then
such contract or lease is deemed rejected.
Analysis
14.
The present deadline pursuant to section 365(d)(1)
expires at the end of the day on
May 30, 2013. If the Contracts were to be deemed r
ejected, that result would constitute a
potentially significant forfeiture of value from th
e Estate.
15.
When a lease or contract has been rejected under se
ction 365(d)(1), it is
“‘abandoned and [is] no longer property of the esta
te.’” In re Biggs, 271 Fed. Appx. 286, 288
(3d Cir. 2008) (citing In re Stoltz, 315 F.3d 80, 8
5 n.1 (2d Cir. 2002)). Moreover, if a request is
not made to enlarge the period to assume or reject
within the sixty day period identified in
section 365(d)(1), “[t]he contract is rejected by o
peration of law and cannot be revived for either
the benefit of the estate or a debtor in bankruptcy
.” In re Benson, 76 B.R. 381, 382 (Bankr. D.
Del. 1987).
16.
The Trustee respectfully submits that “cause” exist
s within the meaning of section
365(d)(1) for extension of the assumption/rejection
deadline. The Trustee is actively exploring a
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sale of the Estate’s assets, and may be able to rea
lize significant value for the benefit of the
Estate and its creditors.
17.
Many of the Contracts may be vital to the Trustee’s
ability to obtain maximum
possible value in a sale. As the Trustee’s analysi
s of the Contracts and marketing efforts
progress, he may seek to reject those Contracts in
which potential purchasers have no interest
and/or that otherwise appear to have no value. How
ever, at the present time, the Trustee believes
that preserving all the Contracts is imperative, in
order to avoid the possibility that a potentially
valuable Contract will become rejected by operation
of law.
Notice
18.
Notice
2
of this Motion has been given to (i) the Office of
the United States
Trustee; (ii) the Debtor’s counsel; (iii) the parti
es listed as counter-parties to leases or contracts
as appearing in Schedule G of the Schedules of Asse
ts and Liabilities filed in the Debtor’s
bankruptcy case; (iv) Daiichi Sankyo Company, Limit
ed; (v) IDIS Limited; (vi) Dell, Inc.; (vii)
Novasep Synthesis; (viii) ICON Clinical Research Li
mited; (ix) Molecular Biosystems, Inc.; (x)
Michael Yoshitsu; (xi) the Debtor’s secured credito
rs as appearing in Schedule D of the
Schedules of Assets and Liabilities filed in the De
btor’s bankruptcy case; (xii) the Debtor’s
forty-five largest unsecured creditors as appearing
in Schedule F of the Schedules of Assets and
Liabilities filed in the Debtor’s bankruptcy case;
and (xiii) all parties who have requested notice
pursuant to Federal Rule of Bankruptcy Procedure 20
02. In light of the nature of the relief
requested, the Trustee submits that no further noti
ce need be given.
2
The service of this Motion on any party shall not
constitute an admission that such party and the Deb
tor are parties
to an executory contract for purposes of 11 U.S.C.
§365.
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19.
WHEREFORE, the Trustee respectfully requests that t
he Court enter an order in
substantially the attached form: (i) further extend
ing the time for the assumption or rejection of
the Contracts by one-hundred twenty (120) days, thr
ough and including September 27, 2013,
without prejudice to the Trustee’s ability to reque
st and obtain additional extensions; and (ii)
granting any such further relief as may be appropri
ate.
Dated: May 29, 2013
COZEN O’CONNOR
By:
/s/ Simon E Fraser
John T. Carroll, III, Esq. (No. 4060)
Simon E. Fraser, Esq. (No. 5335)
1201 N. Market Street
Suite 1001
Wilmington, DE 19801
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
Counsel to the Trustee,
George L. Miller
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