Cash-strapped Sicel Technologies has reached a truce with a group of top managers and other employees who were seeking to push the company into involuntary bankruptcy.
Today the company and the executives who petitioned for the involuntary bankruptcy filed a motion asking U.S. Bankruptcy Judge Stephani Humrickhouse to delay ruling on the issue.
"After discussion, Sicel and the petitioners have agreed upon terms under which Sicel may continue operations without entry of an order...for a period of 90 days," the filing states. "The parties request a status conference with the court now to explain why they believe such a course of action is appropriate."
The company also issued a statement proclaiming that "Sicel's operations are continuing and several employees who have previously been furloughed have returned to work."
Details of the settlement weren't disclosed. Calls to the attorneys for the two sides, as well as company chairman and co-founder Dr. Charles Scarantino, weren't returned.
The company also announced that Paul McDaniel, the company's executive vice president and highest-ranking manager, has been named interim president as well as an interim member of the board of directors. McDaniel is one of the petitioners that was seeking to push the company into bankruptcy. McDaniel also couldn't be reached for comment.
Sicel sells a miniature wireless sensor that monitors the levels of radiation used to treat patients with breast and prostate cancer. The sensor enables physicians to make sure the correct amount of radiation is being delivered to the tumor, rather than to healthy tissue nearby.
The company has been fighting the involuntary bankruptcy petition that was filed last month, arguing in court that its financial situation isn't as dire as the management team portrayed. The company also argued that the managers and other employees who joined the petition weren’t owed the vacation pay, sales commissions and back salary that they claimed -- and that they therefore weren’t valid creditors with the right to petition for an involuntary bankruptcy.
Humrickhouse had been expected to rule last Friday on the involuntary petition following a three-day hearing, but she has delayed doing so at the parties’ request while they worked on a settlement.
It's unclear whether the settlement addresses Sicel's financial condition in any substantive way.
The company, which has raised more than $30 million in venture capital to date, has been seeking $20 million in new funds for more than 18 months to keep the company going. In the interim it has been limping along on a series of loans -- totaling $12 million -- from Jonathan Gelles, a director as well as chairman and founder of a London company that helps life sciences companies raise money.
The company’s financial woes cut so deep that, since mid-July, the company had furloughed all but four of its 45 workers -- although senior managers had continued to work without a salary. It's unclear how many employees are working at the firm now after today's announcement that "several" furloughed workers have returned to work.
The company’s debts include about $545,000 in bills that are more than 90 days past due, according to court testimony. The company’s business plan, which was outlined in court, projected losing $6.1 million this year and $4.6 million in 2011.
