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8-K - FORM 8-K - INSIGHT HEALTH SERVICES HOLDINGS CORP | a58128e8vk.htm |
Exhibit 99.1
News Release
Contact:
Trace Longo
Longo Communications
(949) 364-2821
Trace Longo
Longo Communications
(949) 364-2821
InSight Health Services Holdings Corp.
Reaches Agreement with its Creditors to Restructure its Balance Sheet
through a Prepackaged Chapter 11 Reorganization
Reaches Agreement with its Creditors to Restructure its Balance Sheet
through a Prepackaged Chapter 11 Reorganization
Company to Continue Normal Operations
LAKE FOREST, Calif. ... December 12, 2010 ... InSight Health Services Holdings Corp. (the
Company) (OTCBB: ISGT) announced today that the Company and certain of its subsidiaries have
commenced a prepackaged reorganization under chapter 11 of the United States Bankruptcy Code in New
York to deleverage the Companys balance sheet and eliminate all of its outstanding senior secured
floating rate notes due 2011 (the Notes) constituting more than $290 million of debt. On December
2, 2010, the Company said it had reached an agreement in principle with holders of a significant
majority in aggregate principal amount of its Notes regarding a restructuring of the Notes. The
Company has filed its prepackaged chapter 11 plan for which the Company distributed ballots and
solicited votes from the holders of the Notes to accept the chapter 11 plan. As of the filing, the
Company received votes accepting the plan from holders in excess of 70 percent in amount of the
Notes. In addition, an approximately $15 million post-petition financing facility provided by its
existing revolving lender, Bank of America, N.A., will provide the Company with additional
liquidity during its chapter 11 cases.
After extensive discussions with the holders of the Notes and additional discussions with Bank of
America regarding the post-petition financing package, the Company and the noteholders agreed to
the terms of a chapter 11 plan that will convert the Notes into 100 percent of the equity in the
reorganized Company. The Companys existing shareholders will receive warrants for new common
stock. The plan, which still requires court approval, also provides for full recovery for the
allowed claims of the Companys general unsecured creditors.
Kip Hallman, the Companys President and CEO, stated, We are continuing to operate our business as
usual to provide quality services to our patients and our customers. Todays filings are part of
our plan to complete the reorganization as quickly as possible. We look forward to emerging as a
much stronger business, with a capital structure that
will enable us to maximize the long-term value of the company. The voting deadline for the
prepackaged plan is December 27, 2010.
The Companys management team and employees will continue to operate the business in the ordinary
course throughout the restructuring. Together with cash flows from operations, the $15 million in
committed post-petition financing provides stability and ample liquidity to fund daily operations
without interruption, including payments to vendors and to meet all customer and employee
obligations.
The Company has filed motions seeking to continue to pay trade creditors under normal terms in the
ordinary course of business and to continue to provide pay and benefits to its employees without
interruption. The Company has filed several other customary first day motions with the bankruptcy
court, including with respect to its cash management procedures, which will help it to continue
conducting business without interruption while it pursues its restructuring on an expedited basis.
With its committed financing and stakeholder support, the Company expects to complete its
prepackaged restructuring expeditiously. A copy of the plan and the disclosure statement in support
of the plan can be viewed free of charge at the Companys restructuring website:
www.bmcgroup.com/insight.
The Company has hired Jefferies & Company, Inc., Kirkland & Ellis LLP and Zolfo Cooper, LLC to
assist in its restructuring efforts.
The new securities issued pursuant to any plan of reorganization have not been registered under the
Securities Act of 1933, as amended (the Securities Act), or any state securities laws. Therefore,
the new securities may not be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements of the Securities Act and any applicable
state securities laws.
This release does not constitute a solicitation of consents to or votes to accept any chapter 11
plan or an offer to purchase any securities or a solicitation of an offer to sell any securities.
Any solicitation or offer will be made pursuant to a disclosure statement and applicable law.
About the Company
Insight Imaging, headquartered in Lake Forest, California, is a provider of retail and wholesale
diagnostic imaging services. Insight Imaging serves a diverse portfolio of customers, including
healthcare providers, such as hospitals and physicians, and payors, such as managed care
organizations, Medicare, Medicaid and insurance companies, in over 30 states, including the
following targeted regional markets: California, Arizona, Texas, New England, the Carolinas,
Florida and the Mid-Atlantic states. For more information, please visit
www.insighthealth.com.
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Safe Harbor
The foregoing contains forward-looking statements regarding the Company. They reflect the Companys
current views with respect to current events and financial performance, are subject to many risks,
uncertainties and factors relating to the Companys operations and business environment which may
cause the actual results of the Company to be materially different from any future results, express
or implied by such forward-looking statements. The Company intends that such forward-looking
statements be subject to the Safe Harbor created by Section 27(a) of the Securities Act of 1933 and
Section 21E of the Securities and Exchange Act of 1934. The words and phrases expect, estimate,
and anticipate and similar expressions identify forward-looking statements. Certain factors that
could cause actual results to differ materially from these forward-looking statements include, but
are not limited to, the following: (i) the outcome of any bankruptcy proceedings, including
whether or not the proposed plan is ultimately approved by the bankruptcy court and the final terms
thereof; (ii) the potential adverse impact of any chapter 11 bankruptcy filing on the Companys
business, financial condition or results of operations; (iii) the Companys ability to obtain court
approval with respect to motions in the chapter 11 proceedings prosecuted from time to time and to
develop, prosecute and confirm and consummate any plan of reorganization with respect to the
chapter 11 proceedings and to consummate all of the transactions contemplated by any such plan of
reorganization or upon which consummation of such plan may be conditioned; (iv) the occurrence of
any event, change or other circumstance that could give rise to the termination of the
restructuring support agreement that the Company has entered into with certain of its noteholders;
(v) the Companys ability to successfully implement its core market strategy; (vi) overcapacity and
competition in the Companys markets; (vii) reductions, limitations and delays in reimbursement by
third-party payors; (viii) contract renewals and financial stability of customers; (ix) changes in
the nature of commercial health care insurance arrangements, so that individuals bear greater
financial responsibility through high deductible plans, co-insurance and co-payments; (x)
conditions within the healthcare environment; (xi) the potential for rapid and significant changes
in technology and their effect on the Companys operations; (xii) operating, legal, governmental
and regulatory risks; (xiii) conditions within the capital markets, including liquidity and
interest rates and (xiv) economic (including financial and employment market conditions), political
and competitive forces affecting the Companys business, and the countrys economic condition as
whole.
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