RESEARCH TRIANGLE PARK — aaiPharma has secured a buyer for its pharmaceuticals division and is planning to initiate Chapter 11 bankruptcy filings this week, the struggling pharmaceutical firm said in a SEC filing on Monday.

On Tuesday afternoon, aiiPharma confirmed it had sought protection while closing on bankruptcy financing and selling its pharmaceutical division.

“Securing (debtor-in-possession) financing and entering into an agreement to sell the pharmaceuticals division are important steps in reorganizing aaiPharma to position it for future success,” said Ludo Reynders, president and CEO of aaiPharma, in a statement. “This process provides us the opportunity we need to restructure our finances, strengthen our business performance and work toward a sustained turnaround. We appreciate the continuing support of our customers, creditors, and suppliers and the dedication of our employees to making aaiPharma healthier overall.”

The news sent aaiPharma stock ( up 5 cents to close at 37 cents on Monday. It gave back those gains in afternoon trading Tuesday.

aaiPharma is in default on loans, has been delisted from Nasdaq, and is under investigation for financial irregularities.

In its Monday filing, aaiPharma outlined two scenarios for the company’s future. Both include the firm seeking protection from creditors and reorganization.

The company also said it had secured $210 million in debt financing for the bankruptcy procedure. However, the financing is linked to aaiPharma selling off its pharmaceutical division, the filing said. A filing last week said aaiPharma had secured debt financing from Silver Lake Finance.

“On May 6, 2005, we entered into an asset purchase agreement to sell the assets of our Pharmaceuticals Divisions for $170 million, subject to certain adjustments, and contingent royalties, of which $8 million would be placed in escrow at closing to fund our obligations that may arise after completion of the sale,” the SEC filing said. “The asset purchase agreement contemplates that, at the closing of the asset sale, the purchaser will enter into agreements with us pursuant to which we would provide manufacturing and other support services.”

aaiPharma said a new filing would be made on or before May 12 to outline further specifics.

In a reorganization, the company said “the interests of our current stockholders would be substantially diluted or eliminated”. Some 300 stockholders would remain, aaiPharma added. The company said it would not be required to file quarterly reports and would save $2.5 million in costs related to Sarbanes-Oxley regulation under the reorganization scenario.


Cisco To Beat Earnings Forecast?

Cisco (Nasdaq: CSCO) reports quarterly earnings, and word on the street from media reports is that the networking giant could exceed forecasts of 22 cents in earnings on revenues of $6.16 billion as forecast by Thomson Financial.

Cisco closed up 19 cents at $18.21 on Monday. Its 52-week high is $24.20.

Earnings will be announced around 4:15 PM.

Note: The forecast revenues total was corrected from $6.61.

Bringing Taj Mahal to America

Bringing the Taj Mahal to America is the subject of entrepreneur Vivek Wadhwa’s latest column in BusinessWeek online. For details about Wadhaw’s adventures in the film industry of India known as Bollywood, see:

Nascar Giveaway at CT Communications

CT Communications is giving away tickets for Nascar’s CTC Pole Night at Lowe’s Motor Speedway on Thursday, May 26. The tickets are available at CTC Wireless stores through May 21.

CTC is also offering a drawing for tickets and other prizes to Nascar’s All-Star Challenge on May 21, plus the big Memorial Day weekend spectacles on May 28 and 29.

For store locations, see: