In a filing late Tuesday night Kalobios (KBIO) filed for Chapter 11 Bankruptcy. This motion was filed in Delaware Court where the company presides, and now it hopes to move on with its business. The reason for doing this is so that it can perform a restructure plan without having a lot of liquidity pressure in place. The company had first attempted to do an out of court restructuring, slashing about 61% of its workforce to save money. 

The company was unable to do this, and now has sought protection filing for Chapter 11 Bankruptcy. Don't let that fool you; Chapter 11 Bankruptcy doesn't mean the company is going out of business. What this means is that the company will have to find a way to restructure its organization in a way that it can pay back its creditors accordingly. 

The company hopes that it can restructure itself and continue its pipeline. Shkreli and other investors came in after Kalobios had no longer cash to run its business. They invested a total of 70% of capital to bring the company back to life. The problem was that Shkreli has been arrested for fraud charges by the SEC in Mid-December. The charges don't relate to Kalobios, instead they relate to Retrophin (RTRX) where Shkreli was the CEO many years ago. 

Now we shall see if the company can re-structure itself in a way that it can continue to operate its business. There is no definite way of knowing if the KBIO ticker will still trade on the Nasdaq even if the company restructures itself, because now the Nasdaq has already sent a letter in an attempt to de-list the company. Kalobios has sent an appeal to Nasdaq to see if it can reverse course. With the ouster of the CEO, many directors leaving, and many negatives it is probably best to avoid this name entirely.