Judge Clears zNose Machine Maker to Exit Bankruptcy
The Nevada-based seller of zNose machines, which can detect traces of cancer, explosives and palm tree fungus, got clearance from a judge to leave more than $8 million of debt behind in bankruptcy.
At a hearing on Wednesday, Judge Peter Carroll of the U.S. Bankruptcy Court in Santa Barbara, Calif. signed off on Electronic Sensor Technology Inc.'s (ESNR) reorganization plan.
Electronic Sensor executives said the bankruptcy-exit plan will give the company a fresh financial start to pursue new ways to use its zNose machines, which they said can pick up on soft-tissue carcinomas that indicate lung cancer and breast cancer.
Electronic Sensor filed for chapter 11 protection on Oct. 23 before it could finish switching to focus on the health-care industry, saying it needed a $1.9 million bankruptcy loan to survive. The zNose machine's sales have been flat during the past three years after falling 70% from a sales peak of $2.2 million in 2008, according to court papers.
In court papers, Electronic Sensor lawyers said only one creditor voted against the company's reorganization plan, which promises to pay creditors 15% of what they are owed or, alternately, will give them an ownership stake in the company.
Formed in 1995, Electronic Sensor hasn't made money yet on the sale of chemical-vapor detection instruments, which can pick up on compounds in concentrations so small that they are measured in parts per trillion. Under the company's reorganization plan, its current ownership, which is divided among about 45 investors, will be canceled.
Write to Katy Stech at katy.stech@wsj.com. S
ubscribe to WSJ: http://online.wsj.com?mod=djnwires (END) Dow Jones Newswires April 30, 2015 13:27 ET (17:27 GMT) Copyright (c) 2015 Dow Jones & Company, Inc. 043015 17:27 -- GMT Story ID: APR302015_DJQ_048h Keywords: BANKRUPTCY-RELATED FILINGS, CORPORATE ACTIONS, ALL COMPANY NEWS, CORPORATE RESTRUCTURINGS, INDUSTRIAL Symbols: CFDAY, ESNR
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