A pharmaceutical company that had been previously making waves in the industry has filed for bankruptcy, according to local business news. Vestiq Holdings, which Michigan residents may recognize as the parent company to both Vestiq Pharmaceutical and Praelia Pharmaceutical, has filed paperwork for Chapter 7 bankruptcy and is in the process of closing down both arms of its business. It is hoped this will help to satisfy outstanding creditors while maintaining the integrity of the personal finances of company leadership.
The company rose to prominence in Jan. 2013 when it immediately began buying up consumer and pharmaceutical properties. It assigned Vestiq Pharma as its primary business developer and Praelia Pharma for marketing and customer relations. It also acquired products from BioAlliance and MonoSol Rx, marking a meteoric rise to success.
However, the fall was just as rapid. For unknown reasons, the company accrued almost $14 million in debt against only $11 million in assets by the time the paperwork was filed in May of this year. The company will now begin the process of liquidating assets to begin satisfying creditors, including Vanguard Pharma, which claims a $4 million debt all to itself.
In a tumultuous field like pharmaceuticals, companies can be made and broken in short order, as some Michigan insiders are aware. Thankfully, Chapter 7 bankruptcy should allow the leadership of Vestiq to step back safely while satisfying creditors, keeping their own finances free of financial responsibility for any outstanding debts. This in turn can ensure the company's owners can reenter the market from a stronger financial footing.
Source: bizjournals.com, "Morrisville pharma files Chapter 7 bankruptcy", Jason deBruyn, May 6, 2014