PharmaKinetics Laboratories Inc. was awarded some relief yesterday from the financial pressures that forced it into bankruptcy, as the U.S. Bankruptcy Court in Baltimore allowed the company to make use of accounts receivable in the normal course of business.
Joel I. Sher, a bankruptcy lawyer retained by the pharmaceutical-testing and consulting company, said the receivables -- money owed to PharmaKinetics for work completed -- had earlier been termed by the court as cash collateral and therefore not available for the company's use.
If all of the receivables are collected, Mr. Sher said, it will total $8 million to $10 million. He declined to project how much of the money owed would be collected.
Maryland National Bank, PharmaKinetics' largest secured creditor, had previously agreed to the company's use of its receivables, he said.
Mr. Sher said PharmaKinetics owes Maryland National more than $8 million, including $6.3 million for an industrial revenue bond, $325,000 accrued from a revolving line of credit with the bank and $2 million in a term loan.
PharmaKinetics filed for bankruptcy Nov. 19, seeking Chapter 11 protection from its creditors during reorganization. Mr. Sher said the company acted after "a calling of the loans" by Maryland National.
PharmaKinetics' stock closed at 15.62 cents in over-the-counter trading yesterday.