Molecular Insight Pharma files for chapter 11

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Molecular Insight Pharmaceuticals (MIP) has entered into a $45 million financing commitment from Savitr Capital to be effected through a corporate reorganization under a chapter 11 filings. The company also made changes in its management to implement the restructuring.

The Savitr investment is subject to a number of conditions, including: the emergence of MIP from its corporate restructuring by March 31, 2011; adherence to a cash collateral budget; satisfactory resolution of various issues related to Onalta, a drug candidate; and certain bankruptcy-related preconditions, including the entry of certain final orders by the Bankruptcy Court incorporating a confirmation order related to the company’s chapter 11 plan as well as the court’s approval of a breakup fee and expense reimbursement protections for the benefit of Savitr.

The investment from Savitr would be in the form of common stock at $0.45 per share, representing 90 percent of the Cambridge, Mass.-based MIPs common stock. The Savitr investment also provides for a 30-day period during which the company is permitted to solicit other inquiries, proposals and bids from third parties who desire to propose an alternative transaction to the one proposed by Savitr.