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The Scooter Store Files Chapter 11, Plans Sale of Assets

April 16, 2013, 07:25 AM
Filed Under: Bankruptcy

The Scooter Store announced that it will move to transform its business model through the sale of substantially all of its assets under section 363 of the United States Bankruptcy Code. As part of these efforts, the company commenced a voluntary chapter 11 case in the United States Bankruptcy Court for the District of Delaware.

In a press release, the company indicated it is seeking to retain Morgan, Lewis & Bockius and Young Conway Stargatt & Taylor as restructuring counsel, the investment banking firm of Morgan Joseph TriArtisan to assist in the 363 sales process, and Lawrence Young of AlixPartners, LLP as chief restructuring officer.

“The company provides a necessary product and service that is valued by a growing sector of the world’s population,” said Martin Landon, the company’s chief executive officer. “Unfortunately, historical overhangs coupled with an increasingly complex regulatory environment and mounting economic pressure in the healthcare sector have significantly impacted the company’s ability to operate under its current model,” said Landon. “The Company is using the chapter 11 vehicle to seek to create a new, financially healthy provider that operates in strict accordance with all legal, contractual and regulatory requirements,” continued Landon, “which would help the company complete the business turnaround that we were brought in to do.”

The Scooter Store said that it is adjusting to new market conditions and strengthening its business model to maximize value, compliance, profitability and the quality of customer service. Under a new model, the Company would maintain its core product offering and strong customer base within a network of high value, local distribution center businesses. Post sale, the company anticipates that it will operate with a streamlined footprint and a new focus on working with healthcare professionals.

The company has received commitments for debtor in possession financing which is expected to provide sufficient working capital for the Company's operations and the 363 sale process. “The commitment for debtor in possession financing is a vote of confidence in our planned path forward by our lenders,” said Lawrence Young, the Company’s chief restructuring officer. “As we navigate this process, the Company’s distribution centers will remain open and serving existing customers according to regular posted business hours.”

The company expects to continue operating with its current workforce level throughout the restructuring process. Toward that end, the company has filed a variety of first day motions seeking approval to pay employee wages, and honor customer warranties and programs. The company said that its suppliers should expect to be paid for goods and services delivered after the filing. The Company also intends to meet all contract, quality and supplier standards associated with existing payer agreements.

The Scooter Store a leading supplier of power mobility solutions, including power wheelchairs, scooters, lifts, ramps, and accessories. The Scooter Store's products and services provide today's seniors and disabled persons potential alternatives to living in nursing homes or other care facilities. Headquartered in New Braunfels, Texas, the Scooter Store has a nationwide network of distribution centers that service products owned or leased by the company’s customers.

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