HearUSA, Inc. Prepares for Sale of Assets
May 16 2011 - 1:05PM
Business Wire
HearUSA, Inc. (NYSE Amex: EAR), a nationally recognized leader
in hearing care, today announced that it has executed an agreement
to sell substantially all of its assets to an affiliate of William
Demant Holdings A/S, a leading international hearing-care company.
The sale will be facilitated with court assistance under chapter 11
of the US Bankruptcy Code pursuant to a voluntary petition filed by
the Company today in the Southern District of Florida. The Company
announced that it will continue to operate and conduct business as
usual pending the closing of the sale.
“After exploring a range of possible alternatives to meet our
liquidity needs to operate our business, management and the Board
of Directors of HearUSA concluded that a court-supervised sale of
our assets is in the best interest of the Company and its
stakeholders,” said Gino Chouinard, Interim Chief Executive
Officer, President and Chief Operating Officer. “We are committed
to continuing our business operations with minimal impact
throughout the process and will continue to serve our customers
with the high standard of care they have come to expect from
us.”
The Company announced that it has entered into an asset purchase
agreement in which William Demant will serve as the stalking horse
bidder under section 363 of the US Bankruptcy Code. The agreement
contemplates a purchase price of $80 million, including $10 million
debtor-in-possession financing, plus the assumption of certain
liabilities and the payment of certain cure amounts. The Company
has entered into the debtor-in-possession financing agreement with
William Demant to provide funds sufficient to operate the business
during the bankruptcy proceedings and through final sale and wind
up. The asset purchase agreement provides that if William Demant is
the successful bidder, it will assume repayment of the $10 million
loan. Both the asset purchase agreement and the
debtor-in-possession financing agreement were filed with the court
today. “We believe the DIP financing agreement with William Demant
will provide the resources we need to satisfy our obligations to
employees, suppliers and customers, and to meet our obligations
under our managed care contracts. We are committed to make this a
seamless process for all of our stakeholders,” said Chouinard.
To ensure that day-to-day operations continue as usual, the
Company has filed “first day” motions seeking assurances from the
court that employees will continue to receive their usual pay and
benefits on an uninterrupted basis, that the Company can honor its
agreements, and that customers will continue receiving goods and
services as they normally would. The Company said that as part of
the chapter 11 process, it will seek to obtain the “highest and
best” offer for its assets. The Company will hold a
court-supervised competitive auction for its assets with William
Demant’s stalking horse bid as the floor, and seek court approval
to close a final transaction. The Company said it expects to close
within a matter of months.
Customers, vendors, suppliers and others seeking more
information about HearUSA’s court process may contact HearUSA at
1.888.369.8915 or hearusainfo@alixpartners.com. The Company has
retained Sonenshine Partners and Berger Singerman, subject to
bankruptcy court approval, as its advisors in the bankruptcy and
sale process. Interested parties may contact Jennifer Dore Russo of
Sonenshine Partners at 1.212.994.3334 concerning the
court-supervised competitive auction.
The Company also announced that on May 9, 2011, Stephen J.
Hansbrough resigned as Chief Executive Officer and Chairman of the
Board of Directors. The Board has appointed Gino Chouinard to serve
as Interim Chief Executive Officer.
About HearUSA
HearUSA, Inc. (NYSE Amex: EAR) is the recognized leader in
hearing care for the nation’s top managed care organizations
through its network of more than 1,800 hearing care provider
locations, including 134 company-owned centers. HearUSA is the
nation’s only hearing care network accredited by URAC, an
independent, nonprofit health care accrediting organization
dedicated to promoting health care quality through accreditation,
certification and commendation. HearUSA is also the administrator
of the AARP Hearing Care Program, designed to help millions of
American’s aged 50+ who have untreated hearing loss. For more
information about HearUSA visit www.hearusa.com.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements,
including the statements that the Company will continue to operate
and conduct business as usual pending the closing of the sale, that
the DIP financing agreement with William Demant will provide the
resources needed and that a final transaction will close within a
matter of months. These statements involve certain risks and
uncertainties that could cause actual results to differ materially
from those in the forward-looking statement, including such factors
as the company's ability to control costs; the company’s ability to
generate the expected cash flows from operations; and the timing
and other issues relating to the court processes and required court
approvals.
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