Bankrupt company: Healthcare service provider of diagnostic service
Amount of net operating loss: $20,000,000. According to IRS, loss must be used within the next 10 years with no yearly max. limit. Starting in year 2013, the tax loss, if not used, will be reduced $2.5 million per year until the net operating loss is negated.
Current shareholders: Approximately 3,500
Potential tax savings for a company in the 28 percent tax bracket: $5,600,000
Understanding of the transaction
An LOI exists to purchase this company out of bankruptcy has been provided to the Court. $300,000 is required to be put into a bankruptcy escrow account based on the Court’s final approval. The $300,000 technically becomes an administrative lien (first and foremost) that then is converted into equity at time of approval. According to the LOI, existing stockholders of the bankrupt company would get a negotiated stock percentage of the bankrupt company or new company. There is no pre- or post-litigation, fraud or other legal issues involved. There also is no creditors committee to deal with. Approval by the Court and existing stockholders of the bankrupt company would be required.
If you have an interest in learning more about this potential opportunity, please contact Gene Feller of Healthcare Business Solutions at (512) 328-0042 or (512) 740-8890. He will arrange a direct conference call with the appropriate parties to further discuss the issues.
