Rotech to file for bankruptcy

 - 
Saturday, March 16, 2013

ORLANDO, Fla. – Rotech Healthcare announced late on Friday that it plans to restructure and reorganize under Chapter 11 of the U.S. Bankruptcy Code.

The provider plans to file its consensual plan and petitions in the coming weeks. Once it has filed, it expects to complete the process within 90 to 120 days.

“After careful planning and consideration, we are pleased to have reached this major milestone of substantially reducing our debt,” stated President and CEO Steven Alsene in a release. “The company has struggled for years under the debt burden placed on it when it was spin off from its former parent company in 2002. Since that time, dramatic reimbursement reductions have made it essential that we reduce our debt to a manageable level.”

As part of the restructuring:

•    the holders of a $23.5 million term loan would be paid full;

•    the $230 million of 10.75% first lien notes would be amended and the maturity potentially extended;

•    the $290 million in 10.5% second lien notes would be converted into 100% of the common equity of the reorganized company;

•    all outstanding shares would receive a distribution of 10 cents per share (but not exceeding $2.6 million) and then can be cancelled; and

•    trade creditors and vendors would be paid in full in the ordinary course of business as long as they maintain or reinstate existing payment terms.

Rotech is also in negotiations with certain of its secured creditors to obtain debtor-in-possession (DIP) financing to ensure sufficient liquidity throughout what is expected to be a relatively short Chapter 11 process, according to the release.

“With this debt reduction, we believe we will be able to further take advantage of our inherent strengths to grow the company, both organically and through carefully selected acquisitions,” Alsene stated.

Rotech has filed for bankruptcy before. It emerged from bankruptcy in 2002 as a separate company from its troubled parent, Integrated Health Services.

In a filing with the Securities and Exchange Commission (SEC) in 2010, the provider, struggling under $514.6 million in debt, indicated it was considering bankruptcy.

Comments

In all of my 26 years in the HME industry this really takes is the most disappointed that I have ever been with Medicare.

.  I get up this am with my local newspaper in one hand and my much needed coffee in the other, sitting down to try to enjoy my quiet morning after months of worry about CBA and would there be any protection for people that need DME, then what to my surprise and article about Rotech filing bankrupt right in front of my face. 

I fine this some what humous especially after a friend of mine that works for Rotech called me to inform me that Rotech WON BIDS IN ROUND 2 of CBA for oxygen and Cpap. HOW????

Also, we received a letter from another DME in south florida named Medoquip that said that they also won bids in "all" areas of round 2 and now wants to sell there company. 

 

WHAT THE HECK IS GOING ON????

Where is the protection for the people?  Is it too late for action, i really feel that this needs to be stopped.  I have elderly parents that need to access to DME what will happen to them, will they have to stay in a nursing home to receive the items they will soon require will they have to give up there independence?? Will some one tell me??

Yes I am P_ _ _ _ _ off.

 

 

It would be very interesting to know how many Round 2 Competitive Bid contracts Rotech was offered and accepted. It would certainly seem that if they were awarded ANY, then the financial data that each bidder was required to provide to CBIC was worthless.