M*Modal bankrupt, in restructuring talks with lenders and bondholders

By Caroline Salls

Pittsburgh, March 20 - M*Modal filed Chapter 11 bankruptcy on Thursday in the U.S. Bankruptcy Court for the Southern District of New York to align its debt structure with its vision, strategy and operations to better position the company for long-term success, according to a news release.

The company said it has been and remains in discussions with its lenders and bondholders regarding the terms of a consensual financial restructuring plan.

M*Modal's worldwide operations are expected to continue in the normal course throughout the restructuring process.

"When M*Modal was taken private in 2012, the acquisition was financed with a capital structure aligned with a specific set of assumptions that are no longer relevant," chief executive officer Duncan James said in the release.

"As a result, there is a need to restructure the company's balance sheet to better align with changing market dynamics and refinements to our strategy.

"We intend to use the court process to significantly strengthen M*Modal's balance sheet and improve the company's financial flexibility by reducing our debt burden and establishing a capital structure that supports our investment in the future.

"M*Modal has solid revenue, strong operating margins, cash flows consistent with industry norms, a large and growing customer base, and we are continuing to invest in the future.

"We intend to emerge with a strong financial footing so we can continue growing our market share and delivering innovative solutions to our customers."

M*Modal said it expects that its cash on hand, combined with funds generated from ongoing operations, will provide sufficient liquidity to continue operating in the ordinary course throughout the bankruptcy process.

According to court documents, M*Modal has $500 million to $1 billion in both assets and debt.

The company's largest unsecured creditors are US Bank NA of Charlotte, N.C., with a $265.9 million notes claim; Advanced Media Inc. of Tokyo, with a $2.2 million deferred acquisition payments claim; and Cigna Voluntary of Phoenix, with a $1.5 million trade debt claim.

Dechert LLP is serving as legal counsel, Lazard Freres & Co. LLC is serving as investment banker, and Alvarez & Marsal is serving as financial adviser to M*Modal.

M*Modal is a Franklin, Tenn.-based provider of clinical documentation solutions. The Chapter 11 case number is 14-10701.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.