Wednesday, March 16, 2011

Commonwealth Biotechnologies removes board chairman

Commonwealth Biotechnologies Inc. said it has removed its board chairman after he urged shareholders to support his own reorganization plan for the company, which is operating under Chapter 11 bankruptcy protection.

The Chesterfield County-based research and development company said in a statement Tuesday that its board voted March 11 to remove William Guo as chairman and as a director of the company.

Guo, an entrepreneur in China who founded the pharmaceutical company VenturePharm Group, filed various submissions with the Securities and Exchange Commission on March 9, March 11 and again on March 14.

In the filings, Guo urged shareholders to support a reorganization plan that would make him the sole director of the company at a salary of $1. His letter to shareholders claimed that the company's co-founder and chief executive officer, Richard Freer, was unqualified to serve as CEO. He called for a shareholders' meeting in late March.

The company said in a statement Tuesday that Guo's filings were "unauthorized" and were "replete with factual errors, misleading comments and baseless allegations."

The company said its board of directors demanded that Guo retract the statements and inform the Securities and Exchange Commission that the filings were unauthorized. He declined to do so, according to the statement by the company.

Guo also called for the company to delay the sale of its 32,000-square-foot building at 601 Biotech Drive in Chesterfield. Instead, Guo said he wants to cut the company's administrative expenses and pay off its unsecured debt partially with common stock and partially with cash from the sale of its only remaining operating unit, Mimotopes Pty Ltd., a drug discovery and research business in Australia.

A phone message left Tuesday at Commonwealth Biotechnologies seeking comment was not returned. A U.S. representative for Guo listed in the SEC filings said Guo was not available for comment Tuesday.

Commonwealth Biotechnologies provides research services to the biotech industry. Founded nearly 20 years ago by four Virginia Commonwealth University scientists, it was the first business to occupy space in the Virginia Biotechnology Research Park in Richmond in 1994.

In 1999, two years after it sold stock publicly, it moved to a new headquarters and laboratory building in Chesterfield.

After reporting millions of dollars in annual net losses since 2006, the company announced plans last year to sell its assets, pay off its debts and seek a merger partner.

It filed for Chapter 11 bankruptcy protection in January to protect itself from creditors and to halt a foreclosure auction of its building.

The company's plan is to sell its assets and make itself a shell company. It would then seek to complete a "reverse merger" by finding a privately owned company seeking to become public by acquiring a shell business with stock that is already publicly traded.

By: John Reid Blackwell
March 16, 2011
Richmond Times-Dispatch

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