The Scooter Store files Chapter 11 bankruptcy, plans to sell assets

By Caroline Salls

Pittsburgh, April 15 - The Scooter Store Holdings, Inc. filed Chapter 11 bankruptcy Monday in the U.S. Bankruptcy Court for the District of Delaware amid plans to sell its assets.

Chief financial officer Charles Lowrey said in a statement filed with the court that structural challenges within the company's pre-bankruptcy business model, combined with changes to various healthcare laws have hampered Scooter Store's ability to maintain its commercial viability, leading to "significant financial distress."

In addition, Lowrey said government investigations have created significant financial burdens and damaged the company's commercial appeal.

Under a proposed sale timeline, bids would be due by July 23, an auction would be held on July 25, and the sale would close by July 30.

In conjunction with the bankruptcy filing, Scooter Store obtained a commitment for $10 million in debtor-in-possession financing from Crystal Financial LLC.

The DIP facility will mature on Aug. 15, 2013.

Interest will be Libor plus 1,200 basis points.

The company is seeking interim access to $7.5 million of the DIP financing.

According to court documents, Scooter Store has $1 million to $10 million in assets and $50 million to $100 million in debt.

The company's largest unsecured creditors include the following:

• Centers for Medicare and Medicaid Services, based in Baltimore, with a $19.5 million claim;

• Pride Mobility Products of Exeter, Pa., with a $15.91 million claim;

• Shoprider Mobility Products, Inc. of Carson, Calif., with a $7.97 million claim;

• A. Eicoff & Co. of Chicago, with a $3.98 million claim;

• Bank of America of City of Industry, Calif., with a $1.5 million claim;

• New Braunfels Industrial Development Corp., based in Dallas, with a $1.35 million claim;

• Harmar Mobility of Sarasota, Fla., with a $1.21 million claim; and

• Sunrise Medical of Hapeville, Ga., with a $1.04 million claim.

Young, Conaway, Stargatt & Taylor is representing The Scooter Store.

The Scooter Store is a New Braunfels, Texas-based provider of power mobility solutions. Its Chapter 11 case number is 13-10904.

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