Part of my personal comfort with the level of expo

Part of my personal comfort with the level of exposure I have to this investment follows this logic:

1) The science is strong, the drug will be approved for at least one indication, and at that point will no doubt trade significantly higher.

2) The only major impediment to approval - other than time - is money.

3) There is a nonzero probability that management could bankrupt the company, so what’s the worst case scenario upon realizing this inevitability should it happen?

4) The board tells all interested parties or suitors “the bidding starts at $XXmm”. I still most likely make money.

Perhaps my logic is flawed, or perhaps there are legal requirements that would preclude that sort of auctioning. Perhaps the note holders - who do have some rights to reject any deal the company could make, and whose loans are secured by substantially all assets of the company - have an inordinate amount of power and could force bankruptcy rather than sale. I really don’t know, and that sort of research into legal rights and obligations would likely be best left to a bored lawyer type. But this is what I tell myself to convince myself that the worst case scenario at this point never includes me looking in your hypothetical mirror.

I don’t think it’ll matter. I believe this will get financing and succeed despite any real or perceived flaws in management. But risk management requires quantifying the worst case scenario.