Medical Staffing to file for bankruptcy, sell company to first-lien lenders under agreement

By Jennifer Lanning Drey

Portland, Ore., June 15 - Medical Staffing Network Holdings Inc. and its wholly owned subsidiaries entered into a restructuring support agreement that lays out the terms of an agreed-upon financial restructuring of the company's debt and equity, according to a Tuesday filing with the Securities and Exchange Commission.

The parties to the agreement are General Electric Capital Corp. as administrative agent, all of the first-lien lenders under the company's amended and restated credit agreement and 95% of the second-lien lenders under its amended and restated credit agreement.

Under the agreement, Medical Staffing will make a voluntary bankruptcy filing on or before June 28.

Also under the agreement, an entity owned by the first-lien lenders will enter into an asset purchase agreement with Medical Staffing to acquire substantially all of the company's assets and business.

The first-lien lenders will use their first-lien debt as consideration for the purchase, subject to bidding procedures and stalking horse provisions that will be subject to bankruptcy court approval.

The second-lien lenders have agreed not to object to the sale of the company's assets and business to the first-lien lenders subject to the terms and conditions of the restructuring agreement.

DIP facility

Also under the agreement, General Electric Capital, as agent, and the first-lien lenders, have agreed to provide Medical Staffing with a $15 million debtor-in-possession credit facility.

The facility will be used to fund Medical Staffing's working capital requirements and pay the costs associated with the restructuring.

The DIP facility will mature on the earlier of 90 days, with the option to extend the facility for an additional 30 days, and the effective date of Medical Staffing's plan of reorganization.

Interest will be 10%.

Medical Staffing will pay an upfront fee equal to 3% of the maximum amount of the DIP facility.

Based in Boca Raton, Fla., Medical Staffing is a health care staffing company.

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