STOCKTON, Calif. - A Dallas investment company has been hired to manage the fortunes of once high-flying Hometech Medical Services and has an option to buy the bankrupt HME for $11 million.
Best, Patterson, Crothers & Yoeham recently signed a one-year management agreement with an option to buy Hometech, said Mike Crothers, a partner in BPCY.
BPCY invests in healthcare services companies, but Hometech is its first venture into HME. It's too early to say if Hometech can be turned around ("It's a mess," Crothers admitted). But it might be possible to stabilize the company and combine it with another HME, consolidate billing and other business operations, and create a platform for future acquisitions, Crothers said.
"That would cut significant costs out of Hometech and allow us to have a viable entity," Crothers said.
Hometech formed in 1997 when five HMEs merged with dreams of forging a powerful statewide company and possibly even going public. Due to a number of problems, including a difficult statewide managed care contract, the company filed for Chapter 11 on Feb. 21, 2001, to keep creditors at bay.
Once valued at between $30 million and $40 million, Hometech owed secured creditors $16.5 million when it filed for Chapter 11, including $13.5 million to Invacare, according to bankruptcy documents. HME