Court Orders Funding but Companies Struggle
Delaware Chancellor Kathaleen St. J. McCormick ordered Rigmora to comply with nearly all capital calls but rejected Apple Tree’s requests for budgets Rigmora had previously denied. While the ruling provided essential funding, portfolio companies had already laid off roughly 70% of staff and scaled back research programs to survive the financial squeeze.
“The negative impacts of a funding default for early-stage life sciences companies are severe,” the Chancellor noted.
Founders and Bankruptcy Filing
Rybolovlev, who gained controlling interest in Russian fertilizer giant Uralkali and netted approximately $5 billion from its public sale in 2010, is central to the dispute. Harrison, a former New York City surgeon, emphasized the bankruptcy filing is designed to protect stakeholders.
“Apple Tree filed for bankruptcy protection to serve the best interests of our limited partners, our portfolio companies, their employees and founders, and ultimately, the patients who stand to benefit from everyone’s dedication and risk,” Harrison said in a statement.
Alongside Apple Tree Life Sciences, the entities ATP III GP Ltd. and ATP Life Science Ventures LP also sought Chapter 11 protection. The case has been assigned to U.S. Bankruptcy Judge Laurie Selber Silverstein.
Apple Tree is represented by Quinn Emanuel Urquhart & Sullivan LLP and Potter Anderson & Corroon LLP.
