This filing came just days after its lender Hercules Technology III LP informed it that it was in default of their loan agreement. Hercules is demanding immediate repayment of $14.5 mn under its loan agreement with BIND. But faced with cash shortage, BIND is currently not in a position to meet those demands and has run to the courts to seek protection against the creditor seizing its assets.

BIND’s CEO Andrew Hirsch admitted that the notice of default from the lender Hercules triggered the chapter 11 filing. He also said that the board in its wisdom decided that bankruptcy filing was in the best interest of the company, its creditors as well as debtors. David Koch and Polaris Partners among others have a stake in the firm.

The chapter 11 case will allow BIND some time to restructure its business. For instance, the firm could come back to the equity market for a secondary offering to raise more cash. The firm could also seek new partners to put in more money into its business to enable it to fund operations and meet its debt covenants. BIND could also sell some or all of its technologies to raise money. Renegotiating with lenders for better loan terms is also likely to get the firm back on its feet.

BIND is engaged in the work of developing cancer treatments and it works with many partners such as Pfizer on those projects.