NEW YORK (GenomeWeb) – GeneNews said today that it has reached a settlement agreement with the liquidating trust for its former partner Health Diagnostics Laboratory (HDL) to resolve its outstanding $2 million secured demand promissory note.
The Canadian molecular diagnostics has been restructuring following financial trouble stemming from its ownership of Innovative Diagnostic Laboratory (IDL). GeneNews, Cobalt Healthcare Consultants, and HDL formed IDL in 2013 as a joint venture. In mid-2015, GeneNews and Cobalt bought HDL's 33 percent stake in IDL, giving them each equal ownership of the lab. GeneNews then announced in late-2015 that it was restructuring its operations, planning to borrow $400,000 and lay off 16 workers at IDL.
Last spring, GeneNews signed a deal to acquire Cobalt's half of IDL, giving itself full control of the lab. In exchange, GeneNews agreed to assume Cobalt's liability relating to a $1 million secured demand promissory note payable to HDL.
Under terms of the new settlement agreement, which represents a compromise of disputed claims for both parties, GeneNews said it will pay an aggregate settlement amount of $2.1 million to the liquidating trust for the now-bankrupt HDL. This will consist of one initial $25,000 upfront payment, then $15,000 in monthly installments until July, and finally monthly payments of $10,000 until the outstanding debt has been paid in full.
The agreement will be submitted to the bankruptcy court for review and is expected to be approved before the end of March, GeneNews said.