Nutrition 21 Files for Chapter 11 Bankruptcy Protection
The Company does not have sufficient cash to meet a required redemption of its Series J 8% Convertible Preferred Stock on September 11, 2011 for $17,750,000.
Aug 29 2011 --- Nutrition 21, Inc., the developer and marketer of clinically substantiated nutritional ingredients for dietary supplements, foods and beverages, and animal nutrition, has announced that it has filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code.
The Company does not have sufficient cash to meet a required redemption of its Series J 8% Convertible Preferred Stock on September 11, 2011 for $17,750,000. The Company plans on selling all or substantially all of its assets under Section 363 of the Bankruptcy Code. There can be no assurance that an asset sale referred to above will be consummated, or that any proceeds of such a sale would result in the Company being able to make distributions to holders of the Company's preferred stock or common stock. During the pendency of the Company's Chapter 11 proceedings, the Company will remain in possession of its assets and will continue to operate its business.
In connection with the filing of the Chapter 11 Petition, the Company entered into a Plan Support Agreement, dated as of August 26, 2011, with certain holders of the Company's Series J 8% Convertible Preferred Stock. Pursuant to the Plan Support Agreement, the holders of Series J Preferred Stock have agreed, subject to certain conditions, to support a plan of reorganization proposed by the Company under Chapter 11 of the Bankruptcy Code, that is consistent in all material respects with the proposed plan of reorganization described in the Plan Support Agreement. The holders of Series J Preferred Stock that are parties to the Plan Support Agreement represent at least 76% of the outstanding Series J Preferred Stock.
Nutrition 21, Inc., headquartered in Purchase, NY, is a nutritional bioscience company and holds over 30 issued and pending patents associated with chromium picolinate as well as combinations of chromium compounds with other dietary supplement ingredients. Its ingredients are sold to leading dietary supplement, and functional food and beverage manufacturers.
