Favrille resolves debt obligations
This article was originally published in Scrip
Favrillehas resolved its debt obligation to its creditors, General Electric Capital Corporation and Oxford Financial Corporation, which have agreed to release the general lien on the company's assets. The lenders have now received $8.8 million as repayment of outstanding principal and accrued interest and Favrille has reimbursed them with $47,000 of further transaction costs. Acceleration of the loan was triggered after the company's cash fell below the $14.5 million minimum cash covenant on May 30th. Following the failure of the company's lead product, Specifid, to demonstrate activity in a Phase III registration trial, Favrille's future looks uncertain. The company now faces either a reorganisation which might involve in-licensing of products, a merger with another entity or liquidation of the company either inside or outside of bankruptcy, said Dr John Longenecker, president and CEO of Favrille.