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Three owners of Metabolife International Inc., the San Diego company that made a now-banned, ephedra-based weight-loss pill, recently filed motions in U.S. Bankruptcy Court to ensure the company's sale fetches the highest price.
Metabolife filed for Chapter 11 bankruptcy protection late last month in tandem with the announced sale of the firm to a New York-based maker of nutritional supplements that isn't accepting any liability connected to more than 350 outstanding lawsuits filed against Metabolife in recent years.
According to court records, since November 2003, Metabolife has explored a variety of options and negotiated with potential purchasers. It signed a letter of intent in November, and in June signed an asset purchase agreement with New York-based Ideasphere for $23.5 million.
Despite the agreement, as a result of its bankruptcy filing, the company is required to hold an auction to ensure that price is the highest the company could receive. The auction is scheduled for Sept. 19 in U.S. Bankruptcy Court in San Diego.
The auction requires potential bidders to show evidence of possessing funding of at least $25.5 million. The next minimum bid above the current one must be $2 million above what Ideasphere made, according to the court-approved process. Subsequent bids must be in increments of $1,250,000.
David Osias, Metabolife's bankruptcy attorney, said the company has contracted with the Carl Marks Advisory Group in New York to...