Curative prepares to declare Chapter 11
Curative Health Services Inc. said Monday it expects to file for Chapter 11 bankruptcy protection as part of an agreement reached with creditors.
An ad hoc committee of bondholders, holding approximately 80 percent of the Nashua-based company’s senior notes have been working with Curative officials to swap $185 million of senior debt for a cash payment of $27.75 million and all of the equity in a reorganized company.
To aid in the restructuring, General Electric, a major creditor of the corporation, honored its Nov. 7 temporary waiver of collecting on $27 million of senior notes. On Dec. 1, GE issued a forbearance agreement and will not call due the debt through Curative’s reorganization period. The forbearance expires on April 28, 2006.
According to filings with the U.S. Securities and Exchange Commission, Paul F. McConnell will continue as president and CEO of Curative and John C. Prior will continue as chief operating officer and secretary. Thomas Axmacher will continue as CFO until April 30, 2006.
The troubled provider of chronic wound care and hemodialysis solutions has suffered mounting debt from cuts in Medicare reimbursements, several lawsuits stemming from acquired companies and the firing of a senior manager.
Since early September Curative shares have plunged from a three-month high of about $2.25 to its Tuesday close of 16 cents. — CINDY KIBBE