so what is to happen, page-2

And so we find out, but not from the company. Bondholders are not agreeing to wait until the outcome of an appeal. They did agree to defer the hearing until tomorrow which CMQ are seeking an order to make them wait until the appeal.

Here is the outcome from The West

Chemeq woes deepen as backers seek receivers
7th February 2007, 9:00 WST

Concerns over Chemeq’s future heightened yesterday with confirmation that its major backers have pushed for receivers to take control of the struggling biotech.

The admission came as Chemeq returned to court to seek a stay of execution, even as it held further talks with the bondholders who have pushed the group to the brink of collapse.

Stark Trading and Harmony Investment Fund dealt Chemeq a body blow late last year with the issue of immediate repayment demands for a combined debt of $60 million.

The financiers argue Chemeq had breached the conditions of the financing package by not meeting a revenue target in 2005-06.

Chemeq dispute the claim but the WA Supreme Court last week found in favour of the bondholders.

While the company plans to appeal, it first has to secure orders to maintain a stay of execution until the Supreme Court can test the company’s interpretation of accounting rules and the bondholder agreement, and the outcome is known.

Yesterday’s court proceedings revealed Stark and Harmony were pushing for the appointment of receivers ahead of any appeal.

Stark is already understood to have hired insolvency accountants from Ferrier Hodgson to advise it on Chemeq while rival firm KordaMentha has been working with Chemeq on survival strategies.

Chemeq lawyer Ben Luscombe yesterday successfully applied for an adjournment of the hearing until tomorrow in a bid to buy time to negotiate with the bondholders. Mr Luscombe said the adjournment would give the company time to work on an alternative to a receivership that would provide the bondholders with the confidence that Chemeq’s assets would be protected.

“We don’t believe there is any great prejudice suffered by the defendant (the bondholders), particularly as we are in discussions over a regime to protect both parties’ assets,” Mr Luscombe said.

Stark’s lawyer Craig Colvin did not oppose the adjournment.

The adjournment will not provide any comfort for shareholders who have not been able to trade their stock since January 31 when the shares were put into a trading halt.