Rotech has proof of insolvency, company says
ORLANDO, Fla. – Rotech Healthcare hopes a summary judgment in bankruptcy court will prove there isn’t enough value in the company to pay creditors, Dow Jones reported Aug. 14.
If the judge agrees with papers filed Aug. 13 with the U.S. Bankruptcy Court in Wilmington, Del., the summary judgment could shut down a planned two-day trial pitting the company and its creditor supporters against the official committee representing shareholders.
The disagreement is the latest between shareholders and the company since Rotech filed for Chapter 11 on April 8. Rotech has also asked that an official committee representing shareholders be disbanded.
Shareholder opposition prompted Rotech to drop a planned recovery for equity stakeholders of 10 cents a share. Rotech has said that the company is unable to pay its debts, so a long court process would be pointless, Dow Jones reported.
Now, Rotech lawyers contend, the evidence mustered by shareholders supports the company's arguments: An expert for the official committee puts Rotech's value at $540 million or less. According to Rotech, it will take at least $647.5 million to cover the bills, Dow Jones reported.