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Hey,
DVI, Where is the $50 Million? DVI
Files Chapter 11, Announces Resignation, Names New CEO August
5th, Leasing News questioned DVI ability not to make its interest
payment, and according to insiders, would be filing bankruptcy. http://www.leasingnews.org/archives/August_%202003/8-05-03.htm#dvi The
company allegedly tried to sell its portfolio, but was turned down,
and due
to the “talk” of “accounting irregularities” and “possible bankruptcy,”
the company in whole, or in part, was not a very attractive
catch, Leasing News was further told. DVI,
Inc. yesterday announced that it and two of its U.S. subsidiaries, DVI
Financial Services and DVI Business Credit, have filed voluntary petitions
for relief under Chapter 11 of the United States Bankruptcy Code with
the U.S. Bankruptcy
Court in the District of Delaware. DVI elected to file for reorganization
“...as a result of significant financial difficulties stemming from
an unsuccessful diversification strategy, unsuccessful integration of business
units, decreased profitability, concerns regarding near-term liquidity
requirements and the recent discovery of possible accounting irregularities.
“ The
Company also announced that a special committee of independent directors
has been formed to investigate the possible “accounting irregularities.” Leasing News
is told by an informed source the dollar discrepancy could be anywhere
from $50 to $75 million dollars. There
reportedly could be
other discrepancies. DVI
has retained Latham & Watkins as legal counsel and has appointed
AlixPartners as crisis managers. AlixPartners is an internationally
recognized firm with expertise in crisis management and turning around
troubled companies, and
that certainly describes the once very healthy medical industry company. “Our
immediate goal is to stabilize the Company's financial situation and
utilize the Chapter 11 process to enable us to operate the business
as we work to sell the Company's assets," said Mark Toney, a principal
at AlixPartners, who was named “acting”
CEO.. "We strongly believe that DVI's considerable asset portfolio
will be attractive to the market, and we have already had initial discussions
with a number of parties that have expressed interest in the Company."
The
Company said it is continuing to work toward obtaining Debtor-in-Possession
financing, as well as generate cash from within the Company in order
to sustain operations while trying to sell its assets. |
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