Radiography OEM Carestream Health Inc. has filed for voluntary Chapter 11 reorganization with a federal bankruptcy court in Delaware.
In an announcement sent Aug. 23, the Rochester, N.Y.-based company notes the filing culminates a recapitalization process that its lenders agreed to in April.
This week’s announcement says the lenders “overwhelmingly” voted for a plan to advance the April agreement by means of a prepackaged restructuring plan.
Carestream hopes the new move will wipe out around $470 million of debt, which it says would top the previous agreement by some $250 million.
“This process will significantly strengthen Carestream’s balance sheet and position the Company for continued success,” Carestream adds.
The announcement divulges additional pegs in the plan, including:
- Carestream expects to continue operating normally throughout the court-supervised process and remains focused on serving its customers and working with suppliers on normal terms.
- With the overwhelming support of its lenders, the Company expects to move through this process on an expedited basis and complete the recapitalization in approximately 35 to 45 days.
- Certain of the Company’s existing lenders have committed to provide a $80 million debtor-in-possession financing facility to reinforce the Company’s liquidity and fund the costs of the process.
Carestream says it expects to pay its suppliers in full for goods sold and services rendered before, on or after the bankruptcy filing date, Aug. 23.
The company’s business entities operating outside the U.S. are not part of the Chapter 11 process and are running as normal.
The announcement quotes Carestream chairman, president and CEO David C. Westgate.
“With a clear path to completion, we expect to emerge from this process as a stronger partner to our customers, with significantly reduced debt and new owners who also continue to believe in the future of Carestream,” Westgate says. “Carestream has strong market opportunities ahead. I am confident in the strength of our core business and our ability to maintain market leadership moving forward.”
Read the Aug. 23 Chapter 11 announcement here and the April recapitalization notice here.
Also posted are the joint prepackaged reorganization agreement and formal declaration submitted by Carestream’s CFO in support of the Chapter 11 petitions.
Dave P. has worked in journalism, marketing and public relations for more than 30 years, frequently concentrating on hospitals, healthcare technology and Catholic communications. He has also specialized in fundraising communications, ghostwriting for CEOs of local, national and global charities, nonprofits and foundations.