DVI auction ends with no successful bids; company to work with lenders on restructuring

By Carlise Newman

Chicago, Oct. 9 - DVI Inc. abandoned an attempt to sell its assets through an auction after failing to attract an acceptable bid. The company will now look at other alternatives.

DVI said that while a number of bids were received by the time the auction ended on Wednesday, it determined that recovery for creditors may best be achieved by working with its debtor-in-possession lenders and other constituents to maximize value through other means, all of which are being examined.

"Our primary objectives in filing for Chapter 11 were to stabilize DVI's operations and increase the company's cash position to give us the time to assess strategic alternatives to obtain recovery for creditors. To that end, we were able to maintain business operations, arrange a needed DIP facility and organize a process through which we could determine whether outside offers would better maximize value for creditors," said Mark Toney, chief executive officer, in a news release.

"Now that we have conducted the auction process, the key constituents and the company believe that the best way to maximize creditor recovery may be through other means and we will continue to work with the DIP lenders and the creditors' committee in the coming weeks to push this process forward."

Toney said that the company, its DIP lenders and the creditors' committee were in discussions for developing an asset management plan which may include the selling of certain assets as well as running off some portfolios. The plan may include further reductions in operating costs and professional fees associated with the bankruptcy process as part of the overall management of assets and effort to maximize recovery to creditors.

The company said it is highly unlikely that DVI's equity holders will receive any recovery and it is highly likely that the unsecured creditors could be significantly impaired.

DVI filed for Chapter 11 protection on Aug. 25.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.