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American HomePatient files for Chapter 11 to restructure bank debt
By Sara Rosenberg
New York, Aug. 1 - American HomePatient Inc. filed for reorganization under Chapter 11 in order to restructure its bank debt. The company lacks sufficient funds to repay the outstanding balance of $275.4 million on its credit facility at maturation on Dec. 31, 2002.
The company is proposing a "100-percent plan", meaning that creditors and vendors are expected to receive all that they are owed, a company press release said.
"The Chapter 11 filing is a positive, absolutely necessary step that will provide us with a permanent fix to our bank-debt situation," said Joseph F. Furlong III, president and chief executive officer, in the release. "For several years, we have operated on year-to-year extensions of our existing bank debt. Now we have an opportunity for a long-term solution that will allow us to fully pay all creditors, while providing a foundation for future company growth that will benefit our existing shareholders.
Over the last several years, the company has tried to reach a long-term agreement on the restructuring of its bank debt. However, due to the "diverse lending group, including a number of non-traditional participants" an agreement was never reached, according to the release.
"We have strong cash flow and significant cash on hand, and we intend to use those resources to fund operations while under the court's protection," Furlong said. "We fully expect to emerge from Chapter 11 protection within about nine months with a new long-term bank loan facility that will be paid in full over time."
American HomePatient is a Brentwood, Tenn. provider of home healthcare services and products.
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