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Main Subject - The Debt Workout - How to Avoid Bankruptcy and Stay in Business
What’s your worst nightmare as a creditor? How about getting a legal notice out of the blue, announcing the bankruptcy of your biggest customer and debtor? Or getting a written demand for the return of a “preferential payment” that you had received from your now-bankrupt custo
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
mer.
You are unlikely to be aware of an impending bankruptcy, or be given the courtesy ahead of time to speak with the debtor firm, which received your precious goods or services on credit. As a result, you are unable to suggest alternative approaches to help and to minimize t
You are unlikely to be aware of an impending bankruptcy, or be given the courtesy ahead of time to speak with the debtor firm, which received your precious goods or services on credit. As a result, you are unable to suggest alternative approaches to help and to minimize t
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
e damage to your own business. An insolvent company can stay under your radar while still ordering supplies, before all hell breaks loose and it finally disappears from view, taking your firm’s capital with it.
When small corporations feel they have run out of options, they te
When small corporations feel they have run out of options, they te
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
nd to close their doors or file for Chapter 7 bankruptcy liquidation. The costs of the alternative, Chapter 11 court-appointed workout, would protect from creditors in the meantime and keep the business operating. But it involves an up-front payment of perhaps fifty thousand d
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
llars or more. Business people who have hung on too long often complain that they can’t come up with the cash. Besides, the vast majority of small firms that file Chapter 11 quickly realize that they have to liquidate and close down. And it is rare, indeed, for unsecured cre
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
itors to get anything of substance from this.
If your firm is struggling to stay in business, put yourself in the position of your creditors. Don’t become their worst nightmare. It can make much more sense to speak plainly and honestly with them, in a structured process outsi
If your firm is struggling to stay in business, put yourself in the position of your creditors. Don’t become their worst nightmare. It can make much more sense to speak plainly and honestly with them, in a structured process outsi
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
de of bankruptcy known as a workout.
The basic format can be looked at as an “unofficial” Chapter 11 workout. In our experience, many firms in serious financial trouble want the situation turned around, or “worked out”, to permit them to stay in business, as would Chapter 11.
The basic format can be looked at as an “unofficial” Chapter 11 workout. In our experience, many firms in serious financial trouble want the situation turned around, or “worked out”, to permit them to stay in business, as would Chapter 11.
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
Your workout process must then be tailored to resolve disputes, delay and reduce payment commitments, and maintain a good working relationships between the different parties.
The bankruptcy process is cold and methodical, as proscribed by law. There is no need for pleasantries
The bankruptcy process is cold and methodical, as proscribed by law. There is no need for pleasantries
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
A voluntary workout is different. Goodwill is important. It emphasizes courtesy and good communications in an environment designed to voluntarily reconcile the needs of creditors with those of your firm. You will need to share appropriate financial information to let others
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
make an enlightened decision. Creditors normally want to see a snapshot of assets and liabilities, and particulars of what is planned, in order for your firm to stay in business and be retained as a paying customer.
The exercise starts with a debt management plan, which is yo
The exercise starts with a debt management plan, which is yo
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
r company’s road map through the process. This identifies the type and urgency of each liability, these being characterized as secured or unsecured and corporate or personal. It is important to identify those contractual obligations, such as building or equipment leases, whic
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
would permit the lessor to close you down at short notice. And you have to highlight any judgments and suits in progress.
The workout generally starts by proposing restructured agreements to secured asset holders, to ease monthly cash flow commitments. Once this is done, you
The workout generally starts by proposing restructured agreements to secured asset holders, to ease monthly cash flow commitments. Once this is done, you
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
will have a better estimate of net cash flow in succeeding months with which to address unsecured payables.
A workout gives creditors the opportunity to make the settlement decisions your firm needs, in their own enlightened best interests. It can be shown that they will do b
A workout gives creditors the opportunity to make the settlement decisions your firm needs, in their own enlightened best interests. It can be shown that they will do b
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
tter to accept the proposed debt settlements, and retain your firm as a customer, than to take legal action and possibly force your company out of business. Creditors may be invited to an informal meeting, but this is not often necessary or convenient. Communication by teleco
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
ference, fax and e-mail will normally suffice.
From your firm’s perspective, a workout provides a number of advantages over Chapter 11. It holds the promise of a substantially reduced and restructured debt load within a much shorter period than bankruptcy protection. Proceedi
From your firm’s perspective, a workout provides a number of advantages over Chapter 11. It holds the promise of a substantially reduced and restructured debt load within a much shorter period than bankruptcy protection. Proceedi
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
ngs are private and away from the public scrutiny of the bankruptcy court, which could ruin customer confidence and ultimate profitability. There is no huge up-front payment, as much of the work can be completed on a contingency basis. A mountain of time-consuming and onerous
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
ankruptcy paperwork is avoided and there is no trustee to look over your shoulder, searching for process illegalities.
From your creditors’ perspective, the workout holds the prospect of a higher, faster return than in Chapter 11, and certainly more than if your firm goes under
From your creditors’ perspective, the workout holds the prospect of a higher, faster return than in Chapter 11, and certainly more than if your firm goes under
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
It takes weeks, not months or years. A well-executed process ensures that there is no preferential treatment. Unsecured creditors are offered similar pro rata settlements. The process incorporates clear communication and attention to detail, so few problems can be expected
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
to emerge. Creditors come to understand that their losses can be minimized and that there is nothing to gain by pushing the company into bankruptcy and closing it down.
A workout in itself will not ensure your future success. But it provides breathing space to analyze what we
A workout in itself will not ensure your future success. But it provides breathing space to analyze what we
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
t wrong and establish how to return to solvency. If nothing else, you get the opportunity to stay alive. Considering the alternative, what could be better than that?
Ken Thomson
Biz 911™ Inc.
http://www.biz911.com/
Ken Thomson
Biz 911™ Inc.
http://www.biz911.com/
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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