Paradigm’s administrators have asked the Supreme Court of Western Australia for up to three more months to assess sale and recapitalisation proposals. Without the extension, they say they would have no alternative but to recommend winding up the biotech.
- Up to three-month extension sought for second creditors meeting
- Court hearing scheduled for 27 October 2026
- Board-led recapitalisation and sale proposals remain under assessment
- Independent analysis of the PARA_012 Phase 3 trial is outstanding
- Without an extension, liquidation would be recommended to creditors
Liquidation recommendation now the stated fallback
Paradigm Biopharmaceuticals Limited (ASX:PAR) is seeking more time to find a way out of voluntary administration, with its administrators warning that liquidation is the likely recommendation if the court refuses. FTI Consulting’s Christopher Pattinson and Hayden White have applied to the Supreme Court of Western Australia for an extension of up to three months to the period in which the second creditors meeting must be convened.
The application will be heard on 27 October. The administrators said that, without an extension, they would need to convene the meeting by 27 October and would have no proposal sufficiently advanced to put to creditors. In that circumstance, they said, their only alternative would be to recommend that Paradigm be wound up.
Recapitalisation and sale proposals remain incomplete
The requested breathing space is intended to allow the administrators to receive and assess a board-led recapitalisation proposal, progress proposals from interested parties in the sale process, and complete their investigations into Paradigm’s affairs. The application therefore keeps a potential sale or restructuring pathway open, but the filing provides no terms, funding amount or expected creditor return for any proposal.
The company entered voluntary administration in late September after its pivotal knee osteoarthritis programme failed to meet the continuation threshold at interim analysis. The administrators are also seeking an independent analysis of the results from the PARA_012 Phase 3 trial, a process that could inform parties considering whether to fund or acquire the business.
Creditors await the administrators’ report
The administrators’ report to creditors is currently due on 27 October, with the second creditors meeting required by 3 November unless the court orders otherwise. That report is expected to set out the available options, estimated creditor returns under each option and the administrators’ recommendation for Paradigm’s future.
FTI said it expected the outstanding matters could be addressed sooner than the full three-month extension being sought, and that it may still issue the report and convene the meeting in the coming weeks. The immediate test is whether the court grants enough time for a credible proposal to emerge before the next statutory decision point. Until then, the company’s future remains balanced between a possible recapitalisation or sale and a formal recommendation for liquidation.
Bottom Line?
The 27 October court hearing is the next hard deadline: it may preserve time for a deal, but it will not itself resolve Paradigm’s funding, clinical or creditor-return questions.
Questions in the middle?
- Will the Supreme Court grant the full extension, a shorter period or no extension at all?
- What funding, valuation and creditor-return terms will any board-led recapitalisation or sale proposal contain?
- Will the independent review of PARA_012 produce evidence that materially changes the prospects for a continuing business?