Creditors turn up the heat on American HomePatient
BRENTWOOD, Tenn. — American HomePatient, which filed for bankruptcy in July, took some heat in September from creditors, who tried to block compensation and severance package between the company and its senior management.
Creditors characterized as "very aggressive golden parachute(s)" arrangements that pay top executives up to three years annual salary should the company be sold or experience a change in control.
CEO Joseph Furlong called the compensation packages comparable to other companies in financial trouble and said arrangements are necessary to attract top talent to troubled companies.
Additionally, he said, the contracts go back two years, well before AHP filed for voluntary Chapter 11 bankruptcy Aug. 1, seeking protection from creditors while reorganizing $275 million in debt.
By filing for Chapter 11 protection, AHP will be able to continue its day-to-day operations and renegotiate more favorable terms for its debt. The better terms will free up more cash to fuel the company's growth and pay down the debt's principal, Furlong said.
AHP plans to pay creditors all they are owed and expects to emerge from Chapter 11 by early spring, Furlong said last month. HME