Laboratory Partners, Inc. (the “Company” or “MedLab”), a clinical laboratory doing business in eight states and the District of Columbia, announced that on Oct. 25 it, together with six subsidiaries, filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court in Delaware. MedLab affirmed it will continue to operate its business and serve its customers on an uninterrupted basis through its existing facilities and employees, in all of the markets in which it operates, as it moves forward with its restructuring plan.
In conjunction with the filing, and to provide continued support to its business operations while it restructures, MedLab has obtained a $5 million credit facility and line of debtor-in-possession financing from Marathon Special Opportunity Fund, an affiliate of its current senior secured lenders.
MedLab intends to seek immediate permission from the Bankruptcy Court to pursue the sale of two of its divisions to potential purchasers, subject to higher and better offers from other interested buyers and pursuant to bidding procedures to be approved by the Bankruptcy Court. The Company anticipates that, subject to Bankruptcy Court approval, a Court-supervised auction for the Long Term Care division should occur in December 2013. The auction for the Terre Haute area laboratory business should be scheduled in January 2014. The closing of each transaction will occur shortly after each auction.
“MedLab remains totally committed to its mission to provide the highest quality of timely and accurate service to our patients. Just as importantly, the Company seeks to maximize its value for all of our stakeholders,” said Bill Brandt, MedLab’s CEO. “We’ve put together a remarkable and very experienced team to handle the restructuring of the Company. In addition, the Company is truly thankful for the support of its dedicated employees and vendors who share this commitment to serving our patients throughout this process.”
The Company has retained Duff & Phelps, LLC, as its investment banker to assist it in the evaluation and consummation of these sales transactions while also engaging Development Specialists, Inc. (DSI), as its restructuring and operations advisor during the reorganization process. Medlab is also being advised by Pillsbury, Winthrop, Shaw, Pittman LLP, while Morris, Nichols Arsht & Tunnell LLP serve as local Delaware counsel.
MedLab operates premier clinical laboratories serving clients in Ohio, Illinois, Indiana, Missouri, Michigan, Kentucky, Virginia, Maryland and Washington, D.C.