The Scooter Store files for bankruptcy
NEW BRAUNFELS, Texas – The Scooter Store announced today that it plans to sell substantially all of its assets under section 363 of the U.S. Bankruptcy Code.
As part of those efforts, the provider has filed a voluntary Chapter 11 case in the U.S. Bankruptcy Court for the District of Delaware.
“Unfortunately, historical overhangs coupled with an increasingly complex regulatory environment and mounting economic pressure in the healthcare sector have significantly impacted the company’s ability to operate under its current model,” stated Martin Landon, CEO. “The company is using the Chapter 11 vehicle to seek to create a new, financially healthy provider that operates in strict accordance with all legal, contractual and regulatory requirements, which would help the company complete the business turnaround that we were brought in to do.”
Under a new model, The Scooter Store would use its local distribution businesses to maintain its core product offering, but it would operate with a streamlined footprint and a new focus on working with healthcare professionals, according to the release.
The Scooter Store has received commitments for debtor in possession (DIP) financing to allow it to maintain operations and current workforce levels throughout the restructuring process. It has already filed a variety of first-day motions seeking approval to pay employee wages, and honor customer warranties and programs, according to the release.
“The commitment for debtor in possession financing is a vote of confidence in our planned path forward by our lenders,” stated Lawrence Young, chief restructuring officer, in the release.
The Scooter Store’s suppliers can expect to be paid for goods and services delivered after the filing, according to the release.
The provider seeks to retain Morgan, Lewis & Bockius and Young Conway Stargatt & Taylor as counsel; and the investment banking firm Morgan Joseph TriArtisan to assist in the sale process.