Image-guided therapy technology developer IMRIS, its NeuroArm Surgical subsidiary, and its IMRIS Inc. U.S. subsidiary have filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware.
As part of the filing, IMRIS said it intends to sell its business operations to an affiliate of Deerfield Management, which has also provided a commitment for debtor-in-possession financing. This financing, along with the firm's ongoing cash flow, will ensure that IMRIS can continue to meet its financial obligations throughout the Chapter 11 case, according to the vendor. IMRIS also said it intends to conduct a marketing process for its operating businesses during this time.
In a statement, IMRIS CEO Jay Miller noted that a combination of significant fixed operating costs allocated to research and development of new technologies and the variability of the timing of customer payments as a result of the long and delayed installation time frames of its products have contributed to ongoing operating losses, a deterioration in liquidity, and an erosion in equity value for IMRIS. However, IMRIS is encouraged by the opportunity that Deerfield provides for its product lines, key suppliers and vendors, customers, and employees, Miller said. The sale, which is subject to a marketing process and approval by the bankruptcy court, is expected to close sometime in the late summer.
In the meantime, IMRIS said it expects that Chapter 11 protection will allow it to conduct business in an ordinary fashion. The Chapter 11 proceedings do not affect the firm's other operating subsidiaries outside of the U.S. and Canada, IMRIS said.
