Protagenic Therapeutics Inc. (PTIX)

[Kldog]

From previous press release. The company, in consultation with its strategic advisors, is continuing its efforts to maximize the value of its remaining assets for all of its stakeholders.

Pre-packaged bankruptcy.

The Company, just prior to the Chapter 11 filing, entered into a Plan Support Agreement with its senior lenders which will result in the filing of a plan of reorganization, on or before June 30, 2012. Such plan contemplates a redistribution of the assets and equity to creditors and existing equity holders.


http://www.investopedia.com/terms/p/prepackagedbankruptcy.asp#axzz1y3Z2z626

In a prepackaged bankruptcy, or prepack, the plan of reorganization has been voted on and accepted by the classes of impaired creditors prior to the bankruptcy filing. By filing such a plan, a company can give itself a good chance of maintaining employee, vendor, and customer relationships and ultimately of having a successful restructuring.

Preparing and negotiating a prepackaged bankruptcy allows a company to reduce the time spent in Chapter 11 significantly while simultaneously reducing the legal and financial advisory expenses of the case. According to the Bankruptcy Research Database compiled by Professor Lynn LoPucki at the UCLA School of Law, the average duration for a prepackaged bankruptcy in 2009 was 38 days, compared to 306 days for a non-prepackaged Chapter 11 bankruptcy.

http://www.gelending.com/Clg/CapitaLens/11-2010/featureArticle.html