Rotech Announces Dual Strategy to Maximize Value

Rotech Healthcare Inc. announced today that it informed the U.S. Bankruptcy Court that simultaneous with its pursuit of confirmation of its joint plan of reorganization by August, the Company will continue its marketing efforts to identify a buyer for its business.

“Although we have already pursued a sale and other strategic options for a number of years, in light of the formation of the equity committee and the possibility that our shareholders will lose the ten cents per share that was negotiated prepetition, we want to take the extra step of continuing our sale process in order to ensure that we have exhausted every possible source of value for our shareholders,” said Rotech CEO Steven Alsene. “Regardless of which path we follow, we remain steadfast in our commitment to pay trade creditors and vendors in full upon emergence from Chapter 11.”

Any party interested in learning more about Rotech’s sale process should contact Barclays.

During last week’s proceedings, over the objections of the equity committee, the Bankruptcy Court also gave final approval of Rotech’s $30 million debtor-in-possession financing facility which helps to ensure that the Company will have sufficient liquidity to meet its vendor obligations during its Chapter 11 cases.

Rotech filed for Chapter 11 on April 8, 2013 and also filed a pre-arranged plan of reorganization that converts more than $300 million of the Company’s 10.5% Secured Second Lien Notes into common equity of the reorganized Company, thereby eliminating this tranche of secured debt and its related interest expense. Rotech intends to file an amended plan and will seek approval of a disclosure statement on June 13th.

The Company filed its voluntary petitions and plan of reorganization in the U.S. Bankruptcy Court for the District of Delaware in Wilmington. The case number is 13-10741

Proskauer Rose, LLP serves as the Company’s legal advisor, Barclays as financial advisor and AlixPartners as restructuring advisor.

Wachtell Lipton Rosen & Katz serves as legal advisor to each of the Consenting Noteholders holding Second Lien Secured Notes.

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Retrieved From:
May 23rd, 2013