The Scooter Store to Sell Assets in §363 Sale
The Scooter Store announced that it will move to transform its business model through the sale of substantially all of its assets under §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.
The company 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 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.”
“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,” he continued, “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 Young. “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 is a supplier of power mobility solutions, including power wheelchairs, scooters, lifts, ramps and accessories.