Rotech Receives Approval Of First Day Motions; Approvals Ensure Operations Continue Normally
ORLANDO, Fla., April 10, 2013 /PRNewswire/ -- Rotech Healthcare Inc. (OTCBB: ROHI) announced today that the U.S. Bankruptcy Court has granted, on an interim basis, the Company's first-day motions, which were designed to ensure daily operations continue normally during the Company's brief pre-arranged Chapter 11 debt restructuring. The Court approved, among other motions, the Company's ability to continue paying employee wages and benefits.
In addition, the Court authorized the immediate use of $25 million of the Company's $30 million debtor-in-possession (DIP) financing. The Court also approved the use of the Company's existing cash management systems and bank accounts, allowing the Company to issue payments and honor any outstanding checks and to pay those critical trade vendors that sign a vendor support agreement.
The Company received approval of its request for a hearing to establish the adequacy of its disclosure statement. The hearing is scheduled for 2 p.m., May 16, 2013. Since the Company already has the support of the Consenting Holders with a majority in outstanding principle amount of both Rotech's 10.75% First Lien Secured Notes and 10.5% Senior Second Lien Secured Notes for its plan of reorganization, the Company anticipates completing the process by the end of the summer.
"Today's quick approval of our first-day motions is encouraging and puts Rotech on a strong footing as we move forward with implementing our debt restructuring plan," said Steven P. Alsene, Rotech's President and Chief Executive Officer. "These actions, along with interim approval of access to $25 million in new financing, should reassure our employees, customers, our suppliers and the communities we serve that we will continue to maintain daily operations and that it is business as usual for Rotech's locations nationwide."Rotech has established a website at www.rotechsfuture.com for interested parties to view information about the debt reduction and restructuring. Vendors should call the toll-free Vendor Support Center at 877-456-1404 with questions. All other callers including patients, healthcare professionals, shareholders and employees can call a toll-free Information line at 855-816-5314. 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.
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