Bankrupt biotechnology company Melinta Therapeutics Inc. won court approval to use its lenders’ cash to keep operating pending a possible sale of the business to health-care investment firm Deerfield Management Co., WSJ Pro Bankruptcy reported. Bankruptcy Judge Laurie Selber Silverstein said on Monday that Melinta could use cash pledged to its lenders to run its business while in chapter 11 and to “avoid irreparable harm.” Without access to the cash, Melinta would have likely been forced to liquidate, lawyers for the company said. The judge’s decision came after a contentious court hearing in which the U.S trustee — the government’s bankruptcy watchdog — and Vatera Healthcare Partners LLC, a venture-capital and private-equity investment arm of Vatera Holdings LLC and one of Melinta’s largest creditors, objected to the terms of the deal with Deerfield. The objections focused on a so-called adequate protection package that Deerfield would receive if bested at auction or if the deal failed to close by a certain date. Vatera, which says Melinta owes it about $75 million, argued that the proposed two separate $500,000 payments amounted to a breakup fee and extension fee.
