ATLANTA – Officials at MedAvant Healthcare Solutions are expecting that an auction scheduled for Sept. 8 will help revive the struggling company.
The Atlanta-based provider of healthcare technology and transaction services filed for Chapter 11 bankruptcy protection on July 23 in order to address its debt burdens through a sale and restructuring process. The company won court approval on August 19 for the payment of wages, the continuation of benefit and rebate programs and payment of certain vendors to keep operations going during the Chapter 11 process.
A Delaware-based United States Bankruptcy Court Judge has approved the company’s bid procedures and timetable for the Sept. 8 auction sale. The auction was scheduled to be held at 9 a.m. in the Wilmington, Del. offices of the company’s bankruptcy counsel, Young, Conaway, Stargatt & Taylor.
MedAvant officials have maintained they want to reorganize, not give up the fight.
“Contrary to what some of our competitors are saying to our customers, we are not ‘bankrupt’ and we are not going out of business,” said Peter Fleming, the company’s interim chief executive officer. “The court’s ruling … on our bid procedures and sale timetable supports our strategy for the health and continuation of the company for the long term. We already have one purchaser committed to acquiring the company and our employee base, and we think it likely that any other bidders participating in the auction would wish to do the same. This is good news for our employees, customers, partners, and vendors. We greatly appreciate their support and loyalty.”
The one bidder identified so far is Marlin Equity, an El Segundo, Calif.-based private equity firm which has been labeled a “stalking horse” purchaser.
According to Michael P. Richman of Foley & Lardner LP, the company’s principal bankruptcy counsel, several potential bidders are interested in the company. He also noted the company has been achieving better-than-expected revenues since the bankruptcy announcement.
In May, MedAvant – a trade name of ProxyMed – announced that first quarter net revenues had fallen to $8.5 million, compared to $9.5 million for the same quarter last year and $12.8 million for the previous quarter. First quarter operating losses were set at $1.1 million, compared to $900,000 in the fourth quarter of 2007, and net loss was set at $5.4 million, compared to $5.3 million for the previous quarter. Overall, the company lost $36.8 million in 2007 as revenues dropped 17 percent.