ATLANTA – With a new owner on hand, officials at MedAvant Healthcare Solutions are hoping to escape from the shadow of bankruptcy.
A bankruptcy court judge agreed last month to allow the struggling claims clearinghouse to be sold for for $24.35 million. That was the high bid submitted during a September 8 auction by an affiliate of Marlin Equity, an El Segundo, Calif.-based private equity firm. The sale was scheduled to be completed on Sept. 22.
The auction was formerly approved Tuesday by Judge Brendan Shannon. The judge of the Delaware-based U.S. Bankruptcy Court, who has been overseeing the case since MedAvant filed for Chapter 11 bankruptcy protection on July 23, said he was “very impressed” with the auction’s results.
So were MedAvant officials, who saw the auction as an opportunity to re-energize the Atlanta-based company.
“The spirited bidding for the company … confirms our long-held view that MedAvant has been and remains a valuable player in this market,” said Peter Fleming, the company’s interim chief executive officer, in a press release. “We are especially pleased that the auction process went so well. This gives us the opportunity to continue the business substantially as before. We look forward to this new chapter in our history and to the benefits of the sale for our entire team. MedAvant will emerge from this reorganization as a much healthier and stronger company with a dramatically improved balance sheet.”
During the past year, MedAvant sold off its preferred provider organization to SureScripts and its laboratory results reporting business to ETSec to focus on claims.
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.