Halt Medical files Chapter 11 bankruptcy, inks asset sale agreement

By Caroline Salls

Pittsburgh, April 13 – Halt Medical, Inc. filed Chapter 11 bankruptcy Wednesday in the U.S. Bankruptcy Court for the District of Delaware and entered into an agreement under which an affiliate of Acessa Health, Inc. would purchase its assets, according to a news release.

Under the stalking horse bid agreement, the Acessa affiliate agreed to credit bid the amount of the company’s debtor-in-possession financing and, in the bidder’s discretion, an amount not to exceed the company’s outstanding senior secured promissory note obligations. The bidder will also pay $150,000 in cash and assume related liabilities.

If the stalking horse bidder is not the high bidder at auction, Halt will pay it a $200,000 break-up fee and reimburse up to $300,000 of its sale-related expenses.

Competing bids are due by 5 p.m. ET on June 2 and must exceed the stalking horse bid by at least the amount of the break-up fee and expense reimbursement, plus a $100,000 initial overbid amount.

An auction will be held on June 5, if necessary. Bids at auction must be made in minimum increments of $100,000.

“We continue to have great resolve in our mission to advance minimally invasive, uterine-sparing technologies for the treatment of symptomatic fibroids,” Halt chief executive officer Kim Bridges said in the release.

“Moreover, we believe that the proposed relationship with Acessa Health and its affiliates, who have expressed deep support of our mission, is in the best long-term interest of our patients, partners, and stakeholders.”

Halt said the sale process is expected to be completed during the third quarter.

Halt also secured a new, $4.16 million debtor-in-possession credit facility from an affiliate of Acessa Health that will allow it to continue operating as normal during the sale process, without interruption to its day-to-day operations.

The facility will mature on the earliest of 120 days after the bankruptcy filing date, acceleration of the obligations, the effective date of a Chapter 11 plan, the closing of a sale of collateral and the date the lender is granted relief from the automatic stay.

Interest will accrue at the Prime rate plus 1,000 basis points.

According to court documents, Halt had $2.2 million in assets and $156.3 million in debt as of March 31.

Halt did not list any unsecured creditors with claims of $1 million or more.

ACAS LLC, a subsidiary of Ares Capital Corporation, owns 55.6% of the equity interests in Halt Medical.

The company retained Drinker Biddle & Reath LLP and Cooley LLP as bankruptcy and corporate counsel, respectively, and Canaccord Genuity Inc. as investment banker.

Brentwood, Calif.-based medical device company Halt Medical focuses on providing care for women with symptomatic uterine fibroids, including through its patented Acessa System. The Chapter 11 case number is 17-10810.

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