Economy
Related: About this forumKaloBios Pharmaceuticals files for bankruptcy in wake of Shkreli arrest
Source: Reuters
KaloBios Pharmaceuticals files for bankruptcy in wake of Shkreli arrest
BY TOM HALS
KaloBios Pharmaceuticals Inc (KBIO.O), a biotechnology company that fired Chief Executive Martin Shkreli earlier this month after his arrest on charges of securities fraud, filed for Chapter 11 bankruptcy on Tuesday.
The filing comes weeks after KaloBios received financing from Shkreli to avert closing down, only to have those plans upended by his arrest.
Shkreli was arrested on Dec 17 for engaging in what U.S. prosecutors said was a Ponzi-like scheme at his former hedge fund and a pharmaceutical company he previously headed.
Shkreli gained notoriety when, as the chief executive of Turing Pharmaceuticals, he raised the price of a drug used to treat a dangerous parasitic infection to $750 a tablet from $13.50. He resigned as Turing CEO on Dec 18.
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KaloBios named Shkreli as its CEO on Nov. 20, after Shkreli and a consortium of investors bought about 70 percent of its shares for an average price of $1.51, and agreed to provide additional financing.
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Read more: http://www.reuters.com/article/us-kalobios-bankruptcy-idUSKBN0UD0ND20151230
PatrickforO
(14,578 posts)Anything Shkreli is associated with should be anathema to moral people.
He is a swine who perfectly illustrates how much the oligarchs really care about you and me.
This is why I'm supporting Bernie Sanders. He's the only one who will actually try and do something about affronts to decency such as that perpetrated by the slime Shkreli.
GeorgeGist
(25,321 posts)will appreciate your compassion.
JDPriestly
(57,936 posts)their employer over. We need laws that protect the employees, interests in takeovers and buyouts. Used to be that some of these deals were motivated by the wish to take employee pension funds. That probably is no longer so frequent, but in addition to unemployment insurance, we need a system that provides compensation for employees who lose their jobs due to corporate takeovers.
These takeovers add efficiency to our economy in many cases. (Maybe not thhis one) but employees especially those over 40 whose skills need to be updated and who are not sought in large numbers need help tp cover the cost of retrainig and adjustment, getting a new job, maybe even moving.
The social cost to employees is not factored in by our society when corporate restructuring takes place. This deal is not typical, but it. Highlights the probllem.
The displacement of workers should be dealt with by our society as we become more and more efficient. The human costs are enormous even if the overall savings are great from a business point of view.
PatrickforO
(14,578 posts)Let me explain. I've always felt that the interests of labor should be held at least equal to the interests of shareholders. In addition, we need to think about why we've allowed a business model that looks only at profits without considering all stakeholders, even the earth itself. I mean, right now Shkreli and his ilk can move in like vultures, take over a company, strip it, cut salaries, steal pensions and then sell it again for a profit leaving a bunch of ruined lives in his wake. Further, he can come in and purposely pollute the environment, poison rivers with his chemicals, and if he finds a way to do this legally, then it is considered an 'externality' which is defined as something bad that the company is materially but not financially responsible for. This cost of ruining the earth is not figured into what consumers must pay. We see this with big oil, which has raped the earth in a violent, penetrative process and yet we do not pay the real cost of this extraction. This is because our business model allows 'externalities' to exist.
There is a concept called the B (or Benevolent) Corporation, whereby the corporate officers must consider all stakeholders, not merely shareholders in operations. In the final analysis, we are in a race with ourselves. We will either get wise enough to think of ourselves as a species and this earth as our home, or we will go extinct. Either way, the earth will abide. It will be fine as a verdant garden of Eden where everyone has enough. Or it will be fine as a smoking cinder spinning around the earth.
The stakes are really that high, because this neoliberal capitalist model is not sustainable.
JDPriestly
(57,936 posts)starting with corporate law.
Employees are partners in a business in a sense.
mahatmakanejeeves
(57,513 posts)I admit to not being an expert on the subject, but I think that's how this works.
Chapter 11, Title 11, United States Code
Chapter 11 is a chapter of Title 11 of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation, partnership or sole proprietorship, and to individuals, although it is most prominently used by corporate entities. In contrast, Chapter 7 governs the process of a liquidation bankruptcy (although liquidation can go under this chapter), while Chapter 13 provides a reorganization process for the majority of private individuals.
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Features of Chapter 11 reorganization
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Chapter 11 plan
Chapter 11 usually results in reorganization of the debtor's business or personal assets and debts, but can also be used as a mechanism for liquidation. Debtors may "emerge" from a chapter 11 bankruptcy within a few months or within several years, depending on the size and complexity of the bankruptcy. The Bankruptcy Code accomplishes this objective through the use of a bankruptcy plan. The debtor in possession typically has the first opportunity to propose a plan during the period of exclusivity. This period allows the debtor 120 days from the date of filing for chapter 11, to propose a plan of reorganization before any other party in interest may propose a plan. If the debtor proposes a plan within the 120 day exclusivity period, a 180-day exclusivity period from the date of filing for chapter 11 is granted in order to allow the debtor to gain confirmation of the proposed plan. With some exceptions, the plan may be proposed by any party in interest. Interested creditors then vote for a plan.