What qualifies a company to seek Chapter 11 reorganization?
I have been reading posts by the pumping longs that conclude that since Affymax has not run out of cash and plans to have a shareholder meeting on June 6, 2013 that a Chapter 11 bankruptcy reorganization is "off the table", "impossible" and "cannot happen." First, whether or not a corporation has cash is not the determinative criterion for a bankruptcy. Second, the Affymax DEF-14 disclosed that the shareholders, in an advisory capacity only, are entitled to vote on the officers' and directors' 2012 and 2013 compensation packages, which are very generous since concluded before the recall and also provide significant "lump sum" golden parachutes upon involuntary termination (which has already been disclosed by Affymax's 8-K as occurring both before and in early June 2013). Third, the ONLY CRITERION for Chapter 11 reorganization filed in good faith is the just one of the debtor's classes of creditors claims be impaired (creditor gets less than otherwise due) by the debtor's plan of reorganization. Ask yourself, what classes of creditors does Affymax have whose claims may be impaired by a plan of reorganization. Class action securities claimants? Shareholder derivative action claimants? How about the contractor who has the exclusive supply contract to manufacture Omontys that has Affymax purchase amount guarantees? What about Affymax's landlord now that Affymax has shuttered operations and does need all that leased space? Perhaps there are some classes of creditors I do not know about. Maybe even Takeda has some claims? I don't know for certain if Affymax will, in fact, file for Chapter 11 reorganization, but Affymax itself has repeatedly disclosed that it is considering that alternative. Why would anybody listen to the moronic pumpers who just willy nilly conclude that bankruptcy cannot happen or is off the table?