Attached files
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EX-2.1 - EX-2.1 - INSIGHT HEALTH SERVICES HOLDINGS CORP | a58497exv2w1.htm |
EX-2.3 - EX-2.3 - INSIGHT HEALTH SERVICES HOLDINGS CORP | a58497exv2w3.htm |
EX-2.2 - EX-2.2 - INSIGHT HEALTH SERVICES HOLDINGS CORP | a58497exv2w2.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 28, 2011
InSight Health Services Holdings Corp.
(Exact name of registrant as specified in its charter)
Delaware | 333-75984-12 | 04-3570028 | ||
(State or other jurisdiction | (Commission File Number) | (IRS Employer | ||
of incorporation) | Identification No.) |
26250 Enterprise Court, Suite 100, Lake Forest, CA 92630
(Address of principal executive offices) (Zip Code)
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code (949) 282-6000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.03 Bankruptcy or Receivership
As previously reported, on December 10, 2010 (the Petition Date), Insight Health
Services Holdings Corp. (the Company) and certain of its subsidiaries (collectively, the
Debtors) filed voluntary petitions in the United States Bankruptcy Court for the Southern
District of New York (the Bankruptcy Court) seeking relief under the provisions of
Chapter 11 of Title 11 of the United States Code (the Bankruptcy Code). The Chapter 11
cases are being jointly administered under the caption In re Insight Health Services Holdings
Corp., et al., Case No. 10-16564 (the Chapter 11 Cases).
On January 28, 2011 (the Confirmation Date), the Bankruptcy Court entered an order
(the Confirmation Order) confirming the Debtors Prepackaged Joint Chapter 11 Plan of
Reorganization, pursuant to Chapter 11 of the Bankruptcy Code, which was originally filed with the
Bankruptcy Court on the Petition Date and supplemented by the Supplement to Debtors Joint Plan of
Reorganization pursuant to Chapter 11 of the Bankruptcy Code filed with the Bankruptcy Court on
January 18, 2011 (Dkt. No. 134), and further supplemented on January 26, 2011 (Dkt. No. 174) and January 27, 2011 (Dkt. No. 181) (as so amended
and supplemented, the Plan) and approving the adequacy of its accompanying disclosure
statement, which was originally filed with the Bankruptcy Court on the Petition Date and
supplemented on January 21, 2011 (as so supplemented, the Disclosure Statement). Copies
of the Plan and the Disclosure Statement are filed as Exhibits 2.1, 2.2 and 2.3 hereto,
respectively, and are incorporated herein by reference. The Debtors plan to emerge from Chapter 11
after satisfying the remaining conditions to effectiveness contemplated under the Plan, including
negotiating the definitive documents relating to and entering into the Exit Facility (the date that
all conditions to the effectiveness of the Plan have been satisfied or waived, the Effective
Date).
The following is a summary of the material matters contemplated to occur either pursuant to or
in connection with the confirmation and implementation of the Plan. This summary only highlights
certain of the substantive provisions of the Plan and is not intended to be a complete description
of, or a substitute for a full and complete reading of, the Plan. This summary is qualified in its
entirety by reference to the full text of the Plan. Capitalized terms used but not defined in this
Form 8-K have the meanings set forth in the Plan.
The Plan contemplates that upon the Effective Date (i) holders of Insight Health Services
Corp.s Senior Secured Floating Rate Notes due 2011 (the Floating Rate Notes) will
receive their proportionate share of 100% of the new common stock, par value $0.01 per share, of the
reorganized Company (the New Common Stock), subject to dilution by the New Warrants (as defined below); (ii) as part of distributions made to holders
of Floating Rate Notes under the Plan, holders of the Companys existing common stock the
(Existing Common Stock) will receive their proportionate share of Warrants (the New
Warrants) to purchase shares of New Common Stock as described below; and (iii) trade creditors will continue to
be paid in full in the ordinary course of business.
Treatment of Executory Contracts
The Plan provides that all of the Debtors Executory Contracts, with certain exceptions
specified in the Plan, shall be deemed assumed as of the Effective Date, subject to the terms set
forth therein.
Indemnification Obligations
The obligations of the Debtors and the Reorganized Debtors, as the case may be, to indemnify,
defend, reimburse or limit the liability of directors, managers, officers, employees, attorneys,
other professionals and agents who were directors, managers, officers, employees, attorneys, other
professionals and agents of the Debtors or the Reorganized Debtors, as the case may be, on or after
the Petition Date against any claims or causes of action as provided in the certificates of
incorporation, bylaws or other organizational documents, each in place as of the Petition Date, or
applicable state law, survive confirmation of the Plan.
Insurance Policies
On the Effective Date, the Debtors shall be deemed to have assumed and assigned to the Reorganized Debtors all D&O liability insurance
policies. On or before the Effective Date, the Reorganized Debtors may obtain tail coverage (i.e.,
D&O insurance coverage that extends beyond the end of the policy period) under a directors and
officers liability insurance policy for the current and former directors, officers and managers
upon terms reasonably acceptable to the Reorganized Debtors and the Requisite Consenting
Noteholders.
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Contracts and Leases Entered Into After the Petition Date
Contracts and leases entered into after the Petition Date by any Debtor, including any
Executory Contracts and Unexpired Leases assumed by such Debtor, will be performed by the
applicable Debtor or Reorganized Debtor liable thereunder in the ordinary course of its business.
Stockholders
Agreement
As
of the Effective Date, each person or entity that receives New Common
Stock shall be deemed to be bound by the Stockholders Agreement. Each
person that receives a New Warrant shall execute a joinder to the
Stockholders Agreement as a condition to the receipt of any New
Common Stock pursuant to exercise of such New Warrant.
Management Equity Plan
On the Effective Date, the reorganized Company will reserve up to 8% of the fully diluted New
Common Stock for equity grants for the benefit of certain continuing
employees of the Debtors and/or directors of the Reorganized Debtors (the
Management Equity Plan). The terms of the Management Equity Plan and the equity grants
issued pursuant to the Management Equity Plan will be determined by the board of directors of the
reorganized Company.
Assumption of Employee and Retiree Benefits
Subject to the provisions of the Plan, all Compensation and Benefits Programs shall be deemed
assumed on the Effective Date, except for any prepetition employee equity or equity-based incentive
plans, and any provisions set forth in the Compensation and Benefits Programs that provide for
rights to acquire equity interests in the Company. Any and all Compensation and Benefit Claims
(including, but not limited to, Claims relating to the Debtors supplemental employee retirement
program) will be entitled to full payment.
Composition of New Board of Directors After the Effective Date
On the Effective Date, the term of the current members of the board of directors of the
Company shall expire, and the New Board shall be appointed. The members of the New Board shall be
appointed in accordance with the New By-Laws and the Stockholders Agreement.
Sources of Funds
The Plan is to
be funded with cash from operations, proceeds of a senior secured asset-based
revolving credit facility to be entered into by the Reorganized Debtors (the Exit
Facility) and the issuance of the New Common Stock
as described below.
Exit Facility
On the Effective Date, the Reorganized
Debtors will consummate the Exit Facility and will use
the proceeds of the Exit Facility to fund ongoing operations and obligations under the Plan.
Securities to be Issued under the Plan
On the Effective Date, all of the Companys existing equity securities, including Existing
Common Stock and options to purchase Existing Common Stock, will be cancelled. Holders of the
Floating Rate Notes will receive their proportionate share of the New Common Stock of the
reorganized Company in exchange for their Floating Rate Notes. The Floating Rate Notes will be
cancelled upon exchange. The reorganized Company will issue New Warrants to the holders of all
Existing Common Stock.
Pursuant to the Plan:
(a) | the reorganized Company expects to issue shares representing 100% of the New Common Stock pro rata to holders of the Floating Rate Notes, subject to dilution by the New Warrants; and | ||
(b) | the reorganized Company expects to issue New Warrants to purchase 2.0% of the New Common Stock on a fully-diluted basis as of the Effective Date to holders of Existing Common Stock. The New Warrants will expire three years after the date of issuance and shall have an exercise price based on an implied enterprise value of the reorganized Company of $215.0 million as set forth in the Plan. |
The
Plan provides that the reorganized Company will adopt a New
Certificate of Incorporation under which the authorized capital stock
of the reorganized Company will consist of 6.0 million shares of
New Common Stock and 1.0 million shares of preferred stock, par
value $0.01 per share. As of the Effective Date, the Company
estimates that approximately 1.0 million shares of New Common Stock will be issued and outstanding
and approximately 20.4 thousand shares of New Common Stock will be reserved for issuance upon
exercise of the New Warrants distributed in connection with the Plan.
3
Registration Rights
Holders of New Common Stock issued as of the Effective Date will receive certain registration
rights with respect to their shares.
Certain Information Regarding Assets and Liabilities of the Company
Information regarding the assets and liabilities of the Company as the most recent practicable
date is hereby incorporated by reference to the Companys quarterly report on Form 10-Q for the
fiscal quarter ended September 30, 2010 filed with the Securities and Exchange Commission on
November 15, 2010.
Safe Harbor and Forward Looking Information
Certain statements in this report are forward-looking statements. 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 Companys actual results 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 completion of the bankruptcy proceedings, including
whether or not the conditions to the effectiveness of the plan can be satisfied; (ii) the potential
adverse impact of the chapter 11 bankruptcy filing on the Companys business, financial condition
or results of operations; (iii) the Companys ability to successfully negotiate the terms of its
exit facility with its lender or lenders; (iv) the Companys ability to successfully implement its
core market strategy; (v) overcapacity and competition in the Companys markets; (vi) reductions,
limitations and delays in reimbursement by third-party payors; (vii) contract renewals and
financial stability of customers; (viii) 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; (ix) conditions within the healthcare environment; (x) the
potential for rapid and significant changes in technology and their effect on the Companys
operations; (xi) operating, legal, governmental and regulatory risks; (xii) conditions within the
capital markets, including liquidity and interest rates and (xiii) economic (including financial
and employment market conditions), political and competitive forces affecting the Companys
business, and the countrys economic condition as whole.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit | ||
Number | Description | |
2.1
|
Debtors Prepackaged Joint Chapter 11 Plan of Reorganization, filed on December 10, 2010. | |
2.2
|
Debtors Disclosure Statement for Debtors Prepackaged Joint Chapter 11 Plan of Reorganization, filed on December 10, 2010. | |
2.3
|
Supplement to Debtors Disclosure Statement for Debtors Prepackaged Joint Chapter 11 Plan of Reorganization, filed on January 21, 2011. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
INSIGHT HEALTH SERVICES HOLDINGS CORP. |
||||
Date: February 1, 2011 | By: | /s/ Keith S. Kelson | ||
Keith S. Kelson | ||||
Executive Vice President and Chief Financial Officer | ||||
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EXHIBIT INDEX
Exhibit | ||
Number | Description | |
2.1
|
Debtors Prepackaged Joint Chapter 11 Plan of Reorganization, filed on December 10, 2010. | |
2.2
|
Debtors Disclosure Statement for Debtors Prepackaged Joint Chapter 11 Plan of Reorganization, filed on December 10, 2010. | |
2.3
|
Supplement to Debtors Disclosure Statement for Debtors Prepackaged Joint Chapter 11 Plan of Reorganization, filed on January 21, 2011. |
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