Bankruptcy court documents report that InSight wants to sell the Northern California facilities because monthly EBITDA (earnings before interest, taxes, depreciation or amortization) decreased by 14% from July 2009 to September 2010 on average for these facilities. InSight began seeking alternatives for its NorCal operations in mid-2009 and had closed one facility and sold another facility in the area before the bankruptcy filing. Now the company is seeking to exit the NorCal market completely through the SimonMed sale.
According to court filings, InSight provided diligence to several potential purchasers and received four offers. The highest offer, which provided approximately $9 million in consideration, was for the purchase of the NorCal assets and two other facilities. However, that offer was withdrawn by the bidder after the parties could not agree on the terms of an asset purchase agreement. InSight therefore reengaged discussions with the remaining bidders and received two competing bids for just the Northern California facilities. The cash purchase price offered by SimonMed was approximately $600,000 more than the other bidder's offer and SimonMed's bid also provided for InSight to retain any accounts receivable owed on account
of services provided at the Northern California Centers prior to the sale closing date, which InSight asserts will total approximately $1 million. Therefore, InSight determined that SimonMed's bid was approximately $1.6 million higher and selected it as the winning bid.
In light of InSight's extensive marketing of the NorCal facilities already, the company is now asking the bankruptcy court to approve the sale without any further competitive process. A hearing is set on the motion for February 2, 2011. The deadline for parties to object to the motion is January 28, 2011 at 4:00 p.m. (Eastern).
You can read InSight Health's sale motion and proposed asset purchase agreement with SimonMed here: http://www.chapter11cases.com/InSight-Health-Services-Holdings-Corp2010-126--Motion-to-Sell-Free-and-Clear-of-Liens-Debtors-Motion-for-Entry-of-an-Order-Authorizing-the-Sale-of-the-Debtors-Northern-California-Centers-Free-and-Clear-of-All-Liens-Clai-_p_71705.html#axzz1Azpb8lSf
Other important recent bankruptcy court filings in InSight's cases (click on the title of any document for more information or to purchase):
- Final Order authorizing debtors-in-possession to obtain financing, grant security interests and accord priority status and modifying automatic stay; and authorizing the use of cash collateral
- Final Order establishing notification and hearing procedures for transfers of certain equity securities and granting related relief
- Order determining adequate assurance of payment for future utility services
- Final Order authorizing, but not directing, debtors to pay certain prepetition compensation and reimbursable employee expenses, pay and honor employee medical and other benefits and continue employee wages and benefits programs
- Final Order authorizing, but not directing, the Debtors to maintain and administer customer programs and honor related prepetition obligations
- Notice of Filing of Amended Stockholders Agreement, Registration Rights Agreement and Warrant Agreement Term Sheets filed by Ryan B. Bennett on behalf of InSight Health Services Holdings Corp. (Attachments: # (1) Exhibit A# (2) Exhibit B)
For access to all major pleadings filed in this case, please visit http://www.chapter11cases.com/InSight-Health-Services-Holdings-Corp2010_c_1882.html
Read more: Bankruptcy News & Analysis: InSight Health's Northern California Imaging Centers to be Sold http://blog.ch11cases.com/2011/01/insight-healths-northern-california.html#ixzz1BR4UKaeI