Officials at MedAvant Healthcare Solutions have set a September 8 date for an auction sale of the struggling company and already have one purchaser lined up.
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 has won court approval 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.
Company officials announced on August 7 that a Delaware-based United States Bankruptcy Court Judge had approved the company's bid procedures and timetable for the September 8 auction sale. The auction will be held at 9 a.m. in the Wilmington, Del. offices of the company's bankruptcy counsel, Young, Conaway, Stargatt & Taylor. Bids must be filed in writing by September 5.
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. If no other bids are presented at the auction, the company will be sold to Marlin Equity.
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 billion in 2007 as revenues dropped 17 percent.
Just one day earlier, company officials had received a notice of non-compliance from Nasdaq Stock Market after the company's stock failed to maintain a minimum bid price of $1 per share for 30 consecutive trading days. And in April, Nasdaq officials had warned the company for not maintaining a minimum value of publicly held shares of $15 million required for continued listing on the stock market.
In April, the company was issued a going concern qualification from UHY LLP, an independent registered public accounting firm, whose audit opinion was based on declining revenues, recurring losses from operations and limitations on the company's access to capital.