Dextera Surgical (DXTR) announced that it has filed for voluntary Chapter 11 bankruptcy protection. Concurrently, Dextera Surgical entered into an asset purchase agreement with Aesculap, Inc, an affiliate of B. Braun Group, for approximately $17.3M. “We have conducted an extensive assessment of all strategic options for our business, and at this time, we believe it is in the best interest of our shareholders and all stakeholders to proceed with a sale of our assets,” said Julian Nikolchev, president and CEO of Dextera Surgical Inc. “The agreement with Aesculap will serve as a “stalking horse” bid in a court-supervised auction of our assets. We believe this process will continue our mission of keeping our innovative surgical stapling platform and cardiac anastomosis products in the hands of surgeons who understand the promise of our products and technology.”

The voluntary Chapter 11 petition was filed in the United States Bankruptcy Court for the District of Delaware. The sale process will be conducted pursuant to section 363 of the U.S. Bankruptcy Code and is designed to achieve the highest or best offer for Dextera’s assets. The company will continue to operate during this bidding process, which is expected to be completed in 45 to 60 days.

The agreement with Aesculap sets the minimum acceptable bid for the company’s assets, and is subject to Bankruptcy Court approval and certain other conditions. The proposed bidding procedures, if approved by the Court, would require interested parties to submit competitive binding offers to acquire the company’s assets and such parties could include strategic and financial bidders. Assuming qualified bids are submitted, an auction would then be held.

A final sale approval hearing is anticipated to take place shortly after the auction with the anticipated closing to occur by early 2018, and Dextera expects that substantially all of its assets will be sold pursuant to this process. Dextera has negotiated with Aesculap for debtor-in-possession financing to ensure that it has sufficient liquidity to conduct its business uninterrupted and continue to meet its operational financial obligations, including, subject to expected bankruptcy court approval: the timely payment of future employee wages and salaries, as well as maintain benefits; continued servicing of distributors to ensure timely fulfillment of orders and shipments; and other obligations to surgeons and customers.