Owners of Scripps Proton Therapy Center File for Bankruptcy

As Reported in San Diego Business Journal |March 2, 2017

The owner of Mira Mesa’s 3-year-old Scripps Proton Therapy Center has filed for Chapter 11 bankruptcy protection after failing to attract and receive reimbursement for treating a sufficient number of patients.

California Proton Treatment Center LLC said it has arranged a $16 million bridge loan it will use to continue operations at the $225 million facility managed by Scripps Health.

“Our doors will remain open to administer highly specialized cancer therapies, and a patient ombudsman will ensure that our transition to a new organizational framework won’t affect patients or staff,” CPTC’s chief restructuring officer, Jette Campbell, said in a news release.

Proton therapy is a form of precisely targeted radiation proponents say focuses on tumors while sparing surrounding tissue that might be damaged by conventional X-ray therapy. There are three such facilities in California and at least two dozen nationwide.

The bankruptcy filing came six months after Scripps increased the number of patients it treats at the center without receiving prior authorization by health plans. Scripps officials said in November the move led to a 15 percent to 20 percent increase in patient volume at the five-room, 102,000-square-foot facility.

Scripps said at the time it was directing more resources to pressuring private insurers to approve proton therapy treatments that can cost $60,000 or more.

CPTC said in a November statement patient access to the therapy had “steadily increased, and our outlook is positive.”

Scripps President and CEO Chris Van Gorder said he did not know about plans for the bankruptcy filing until after it happened, but that the health care system had been anticipating such a move for months because of CPTC’s “enormous amount of debt.”

“Scripps knew that this was a high-risk venture from the very beginning,” he said.

Van Gorder added that shortly before the center’s opening in 2014, commercial insurers shifted away from proton therapy toward a form of conventional treatment that uses a narrow beam of radiation. He said Scripps continues to believe proton therapy is the more effective therapy, largely because protons stop at the target site rather than continuing through a patient’s body.

He said Scripps has no financial exposure to CPTC’s bankruptcy, and that the health system only leases and operates it.

Lately, patient volume at the center has averaged 70 at any given time, even as more than 200 calls per month come in from people interested in receiving treatment there, Van Gorder said, adding that the facility needs a steady flow of 130 to 140 patients to thrive.

Scripps said in a written statement CPTC has asked the San Diego-based health-care system to continue treating patients at the center according to their contractual agreement.

The center’s medical director, Dr. Carl Rossi, said in CPTC’s March 1 news release the bankruptcy filing will “enhance our operations and allow us to administer our advanced proton therapy care to a wider spectrum of patients.” It was unclear from the release how the financial restructuring would accomplish those goals, and Van Gorder said he assumed Rossi was simply referring to expectations the center would continue to operate.

CPTC’s financial struggles surfaced Jan. 25 in a news release by Varian Medical Systems, a Palo Alto-based cancer technology manufacturer. The company said it had taken a $76 million charge relating almost exclusively to CPTC’s indebtedness to Varian and “lower than expected patient volumes that are insufficient to support CPTC’s capital structure.”

Varian’s CEO, Dow Wilson, said his company believes the proton therapy center can get on a more solid financial footing by “serving a broader patient population with additional health care providers locally and regionally.”

In September 2011, Varian and Dallas-based ORIX Capital Markets LLC agreed to loan up to $165.3 million to CPTC to fund the development, construction and initial operations of the Scripps Proton Center.

In November 2015, the two companies entered into a forbearance agreement, together with J.P. Morgan Chase Bank, which had assumed $45 million of the original loan, to delay receiving principal and interest payments until April 2017, subject to certain conditions.

Then, in January, Varian said it was informed CPTC and its loan agent had taken steps to address liquidity problems at CPTC. Varian’s analysis then was that these actions would “likely result in a serious liquidity event at CPTC, possibly leading to insolvency or bankruptcy proceedings at CPTC.”

In response, Varian decided to impair $38 million of the $98 million, including $29 million in accrued interest, still owed to the company by CPTC.

Loughlin Management Partners has been retained as financial advisor to the Senior Lender’s on this matter.

Erickson Inc. plan of reorganization confirmed by bankruptcy court

As first reported at Erickson Incorporated |March 21, 2017

Erickson’s restructuring will reduce the company’s pre-bankruptcy debt by more than $400 million upon emergence. In order to improve its capital structure and finance its exit from bankruptcy, Erickson was able to (i) obtain a commitment for an asset-based lending facility with a borrowing capacity of up to $150 million, led by MidCap Financial Trust, (ii) reach an agreement on non-cash repayment for $69.8 million in financing obtained during the bankruptcy, and (iii) secure a backstopped $20 million rights offering.

“These financial commitments demonstrate the creditor interest and support in restructuring Erickson’s financial affairs, servicing customer contracts, and enabling Erickson to continue operating well into the future. I am pleased and appreciative of our employees, customers and stakeholders who have supported us throughout this challenging process,” said Erickson president and CEO Jeff Roberts.

With the overwhelming support of all classes of creditors entitled to vote on the plan, Erickson will emerge from bankruptcy with the ability to grow its existing business segments of civil aviation, global defense and security, and manufacturing and maintenance, repair and overhaul (MRO).

“Erickson is extremely satisfied with this quick and successful outcome,” said Erickson CFO David Lancelot. “Erickson’s successful restructuring would not have been possible without the strong support of our funded debtholders and aircraft lessors. The financial impact of this approved plan is very positive and allows us to be far more strategic to compete in the competitive landscape. Haynes and Boone, LLP is Erickson’s restructuring counsel and other restructuring professionals included Imperial Capital, LLC and Alvarez and Marsal North America, LLC.

RadioShack Files for Bankruptcy (Again), Closing 200 Stores

As first reported in InvestorPlace |Mar 9, 2017 |12:43 pm EDT

General Wireless, which operates as RadioShack, is filing for bankruptcy again just two years after it came out of its last bankruptcy.

RadioShack says that it will be closing 200 of its stores at it enters Chapter 11 bankruptcy protection. This will leave it with 1,300 stores still open and it plans to evaluate what to do with these locations.

RadioShack notes that it many choose to keep its remaining 1,300 stores open on an ongoing basis. It claims that this may be the best way to maximize value for creditors. However, it also says it will explore other strategic options.

RadioShack says that it was making efforts toward returning to profitability after coming out of its bankruptcy two years ago. This includes reducing operating expenses by 23% in 2016 and gross profit dollars going up by 8% during that year. However, it still had problems.

“For a number of reasons, most notably the surprisingly poor performance of mobility sales, especially over recent months, we have concluded that the Chapter 11 process represents the best path forward for the Company,” Dene Rogers, President and CEO of RadioShack , said in a statement. “We will continue to work with our advisors and stakeholders to preserve as many jobs as possible while maximizing value for our creditors.”

RadioShack points out in its bankruptcy announcement that Sprint Corp (NYSE:S) was its partner responsible for managing its mobility business. General Wireless is a joint venture between Sprint and Standard General.

RadioShack says that it will post additional information concerning the bankruptcy on its website. Legal documents will be available on the Prime Clerk website. Prime Clerk is the company’s claims agent. It is also getting legal advice from Pepper Hamilton LLP and Jones Day.

Loughlin Management Partners has been retained to serve as financial advisor to General Wireless.

PROCURE PROTON THERAPY NEW JERSEY CELEBRATES FIVE YEARS OF SERVICE TO CANCER COMMUNITY

As first reported at www.procure.com |March 21, 2017

SOMERSET, N.J. (March 21, 2017) – Yesterday, ProCure Proton Therapy Center in Somerset, N.J., celebrated its five-year anniversary. As the first proton treatment center in the tri-state area and the 10th facility in the nation, ProCure is proud to have connected cancer patients and their families, from New Jersey and across the globe, with this life-changing treatment.

Proton therapy is an advanced form of radiation that destroys cancer cells by preventing them from dividing and growing. Unlike standard X-ray radiation, it uses protons – positively charged sub-atomic particles – which precisely target tumors. Proton therapy reduces the risk of damage to healthy tissue and organs near the tumor, and potentially allows patients to receive higher, more effective doses of radiation, but with fewer side effects.

Much to celebrate, and to honor
The anniversary converges with another important ProCure milestone: two weeks ago, the Center graduated its 2,500th patient. To celebrate, new and past graduates, alongside friends, family and ProCure staff, gathered together at the Center for a special graduation ceremony that honored the patient journey and the fight against cancer. The afternoon was rife with inspiring speeches, positive energy and a steadfast sense of community; it was a quintessential ProCure event.

Former ProCure patient Bob Jones is no stranger to these special ProCure moments. Five years ago, he entered the Center seeking treatment for prostate cancer, and was ultimately deemed cancer-free after 44 sessions and countless friendships formed. Bob was the 10th patient to graduate from ProCure, and has been an active member of the Patient Ambassador program since – attending graduations most weeks, sharing his story with others and lending advice to men facing prostate cancer.

“My experiences here in the span of five years – both as a patient and a friend of the Center – have been exceptional. The team here is kind, generous and compassionate, and I’m fortunate to be able to pay it forward through my role as an Ambassador,” Bob reflects. “It’s hard to explain the magic of this place to those unfamiliar – but it’s real, and it’s genuine, and patients are lucky enough to experience it while fighting cancer.”

Victor Lawson, another patient from the first class of 2012 graduates, also treated for prostate cancer, echoes many of Bob’s sentiments: “For me, ProCure played a critical role in my cancer treatment journey. In addition to offering me such great care five years ago, every time I return I’m greeted with the same welcoming atmosphere as when I first walked through the front doors on day one. The connections I’ve made here, both with staff and other patients, will remain my most fond memories of ProCure.”

ProCure’s first-ever patient graduate, Frank Mackinson, who was treated for a plasmacytoma of the skull base, adds, “They raise the bar tremendously as far as care and personalization goes. Since I’ve completed treatment at ProCure, it has been a joy to return to this pleasant facility and supportive community.”

Best-in-class treatment and services
ProCure New Jersey is the only proton therapy center in the metro NY/NJ area equipped with pencil beam scanning (PBS) – the most advanced proton therapy technology available today. The technique moves a proton beam of pencil-point sharpness back and forth across each layer of a tumor’s thickness and paints the tumor with radiation in three dimensions, rendering it ultra-precise and ideal for tumors located next to critical organs, such as those in the prostate, lungs, brain, head and neck, among others. PBS is also effective for pediatric cancers, where sparing healthy tissue is especially important for healthy development. ProCure’s PBS technology expands the center’s ability to treat difficult and complicated tumors, and is reflective of its commitment to continually advance cancer treatment options.

Over the past five years, ProCure has also worked closely with patients and their families to create tailor-made treatment plans that address each patient’s unique needs. The range of support available to patients extends from traditional care and pushing technological boundaries to insurance and financial counselors, a special pediatric playroom for patients and children of patients, and a concierge program to address personal needs like local accommodations.

“In the five years that ProCure’s been around, what’s struck me the most – in addition to our scientific capabilities – was how we’ve elevated patient needs and comfort as paramount values,” states Brian Chon, MD, treating oncologist and Medical Director of the Center. “The team goes above and beyond to make each person who walks through our doors feel like an individual — not just a cancer patient, not just an anonymous case file. It’s simply in the fabric of our culture.”

Dr. Chon continues, “We’re proud to have brought the unique properties of proton therapy to a diverse group of tumor types and cancer patients over these last five years. We will use this milestone to reflect on where we’ve been, how far we’ve come, and how we will work tirelessly to help our patients and the cancer community in the future.”

LM+Co Featured in May Edition of Acquisition International

In an exclusive interview with Acquisition International, Managing Directors Richard Zytkowicz, Patrick Fodale and John Krupar provide their views on turnaround management an corporate renewal.

The interview, published in the May 2016 issue of the magazine, discusses the importance of  turnaround management in today’s business world, the importance of having the right team of turnaround professionals and the challenges that industry faces in 2016 and beyond.

For further information on LM+Co’s Turnaround and Restructuring Practice, Click Here

To read the full interview featured in Acquisitiion International, Click Here

LM+Co’s John Sordillo Featured in Lawyer Monthly

In an exclusive interview with Lawyer Monthly, Managing Director John Sordillo provides his views on the issues and challenges that can arise during the turnaround management process.

The interview, published in the February 2016 issue of the magazine, discusses the importance of timing when introducing a turnaround manager, the steps that can be taken to effectively ward off insolvency and how to navigate the common challenges that turnaround professionals face.

John has been active in the turnaround and restructuring advisory arena for more than two decades, serving in a number of diverse roles, including distressed corporate finance advisor, turnaround advisor and principal investor in distressed companies. His in-depth expertise in the field provides a unique perspective on how companies, and their stakeholders, can manage a tightening credit market as financial recovery continues to pick up pace.

For further information on LM+Co’s Turnaround and Restructuring Practice, Click Here

To read the full interview featured in Lawyer Monthly, Click Here

Middle-Market Oil Field Service Companies: Fighting Zombie Loans in the Oil Patch

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Plummeting energy prices have dramatically increased the number of failing middle-market Oil Field Services (OFS) companies. These zombies in the oil patch can’t stem the virus of negative cash flows despite cutting labor costs, operating expenses and capital budgets. They are still trying to operate but often not paying all their obligations to lenders, vendors, sub-contractors, employees and other creditors. Despite their struggle to survive, many face imminent collapse and liquidation after becoming increasingly over-levered and saddled with equipment they can’t sell.

Lenders are realizing that these zombies lurk in their portfolios, and are witnessing companies, in essence, liquidating to survive. In today’s market, recovery options for lenders are limited as over-supply has led to incredibly low realizable values on OFS equipment. Waiting and hoping for the business to return is no longer an option for lenders. Further delays will only result in the company’s continued deterioration and possible free fall into restructuring or liquidation. Lenders increasingly need to assess and deal with these zombies with the help of an outside professional that can provide their OFS companies with the expertise and guidance to address the immediate lack of liquidity and develop restructuring alternatives that maximizes recovery.

As energy price volatility continues in global markets, LM+Co provides a full range of advisory services to lenders and the OFS companies in their portfolio. Our Energy + Power team can help OFS companies adjust their strategies, restructure operations and develop an approach to confront turbulent market conditions.

Oilfield Service Companies to Ride Out the Low Price of Oil

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LM+Co is pleased to announce that it has enhanced its capabilities to address the restructuring needs of the Energy Sector focusing on debtor and lender advisory services. Our deep knowledge of industrial company operations both in manufacturing and service businesses combined with our core capabilities in turnaround management and restructuring, have been immensely useful to companies and their stakeholders that support oil and gas exploration, production and refining.

We have added a number of folks to our team, most notably Murray Brasseux who has been a leading energy financier for the past 30 years. He has a deep understanding of all aspects of the industry. Murray previously ran the Oil and Gas Division of BBVA Compass Bank in Houston. Having financed hundreds of energy companies over the past three decades, Murray is well known in the industry.

Falling prices for oil and gas has led to a sharp decline in drilling activity. Oilfield service companies are feeling the stress of falling demand for their services. We estimate that oil and gas reserve borrowing bases have contracted by 15-20% during the first half of this year, adding additional liquidity strain to exploration and production companies experiencing both falling revenues and profits. Another contraction in borrowing bases in the second half of this year is a real possibility. Companies and their stakeholders should be planning for just such a contingency.

 A Battle Plan for Oilfield Service Companies to Ride Out the Low Price of Oil speaks to the issues currently facing oilfield service companies and an approach to dealing with the operational and financial pressures. With its full suite of advisory, consulting and corporate finance services, LM+Co can assist companies and their stakeholders to weather the current industry downturn.