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THE MEDISCUS GROUP, INC. FILES FOR CHAPTER 11 PROTECTION; FINANCIALS IMPROVING, CORPORATE HEADQUARTERS MOVES TO AKRON

 THE MEDISCUS GROUP, INC. FILES FOR CHAPTER 11 PROTECTION;
 FINANCIALS IMPROVING, CORPORATE HEADQUARTERS MOVES TO AKRON
 AKRON, Ohio, Feb. 26 /PRNewswire/ -- The Mediscus Group, Inc., one of America's leading manufacturers and distributors of specialty beds for acutely ill patients, yesterday filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code in U.S. Bankruptcy Court here seeking protection from creditors in order to develop and implement a comprehensive financial and operational reorganization plan.
 Richard G. Bear, who recently was named president and chief executive officer, said Mediscus, with 1991 sales of more than $20 million, has a steadily improving cash flow, but liabilities incurred under previous management required the company to seek Chapter 11 protection. Bear emphasized that the filing will not interfere with normal business relations or operations, and the company will continue servicing its existing customers and seeking new ones all across the country.
 The company also announced it had reached agreement with Congress Financial, its principal secured lender, to provide the post-petition financing needed to enable the company to conduct business as usual.
 "The Mediscus Group has shown steady and significant improvements in sales revenue and operating income since September," said Bear, who was named to head the company last July. "We have also substantially reduced operating costs by moving our headquarters to Akron, which includes consolidating systems and operations; reducing non-service personnel, and streamlining the management structure."
 The combination of revenue enhancement and cost reduction steps already in place has resulted in an average $400,000-a-month turnaround in net operating income since August, Bear said.
 He pointed out that over the last seven months, the company has made significant strides in implementing changes and improvements that will expedite the Chapter 11 reorganization.
 "With this filing, we will be able to maintain that momentum, concentrate on additional improvements, and pursue the development and introduction of exciting new products that are at the technological cutting edge in the industry," Bear added.
 Bear was president and a principal stockholder of Akron-based Therapeutic Patient Systems, Inc., a specialty therapy bed distributor that was acquired by Mediscus in 1986. As part of the transaction, he accepted a position as regional sales manager. In 1990, he was named to the Mediscus board.
 Michael K.L. Wager of Benesch, Friedlander, Coplan & Aronoff, legal counsel to Mediscus, said: "With the support of existing creditors, we look forward to the emergence of Mediscus from the Chapter 11 reorganization within a year of the filing. Mediscus expects to emerge as a stronger, more competitive company."
 Among Mediscus' immediate plans is the completion of its corporate relocation from Buena Park, Calif., in suburban Los Angeles, to its regional service, distribution and manufacturing facility at 290 Opportunity Parkway in Akron. The Akron facility houses all corporate officers and staff, about 40 employees. The Buena Park facility will remain a principal distribution center.
 Mediscus, which is privately held, employs about 250 persons in 25 locations around the country. Its customers include more than 600 acute-care hospitals and more than 200 skilled nursing facilities nationwide. It also serves patients confined to their own homes.
 Bear said the company's financial problems stemmed principally from the 1987 acquisition of National Medical Specialties, a distributor of respiratory, anesthesia and critical care products, and the increased corporate overhead to support it. The company also felt the effects of changes in the health care finance system, which has experienced reductions in federal funding and numerous hospital closings.
 The company's principal product is a bed that supports a patient on vapor-permeable, temperature-controlled air sacs in which pressure is regulated to distribute the patient's weight evenly, reducing skin pressure. It is often used for burn victims. The company also distributes other specialized beds for use with trauma patients and patients with respiratory and pulmonary problems.
 In addition, the company is developing new product lines, and will introduce a unique pediatric intensive care crib. This product is currently undergoing review by the Food and Drug Administration.
 Mediscus also:
 -- Provides support services for patient placement, staff training and the transport, cleaning and maintenance of beds in the field.
 -- Markets the Mediscus DFS (Dynamic Flotation System), a low-cost, low air support system that provides pressure relief benefits similar to comparable low air loss beds.
 -- Markets the new Pulmonair 40 bed, which combines rotational therapy with low air loss technology.
 The company has 25 facilities nationwide. Its largest operations, in addition to Akron and Buena Park, are in Columbus, Ohio; Philadelphia; Pittsburgh; Chicago, and Dallas.
 -0- 2/26/92
 /CONTACT: Andrew M. Juniewicz of William Silverman & Co., 216-696-7750, for The Mediscus Group, Inc./ CO: The Mediscus Group, Inc. ST: Ohio, California IN: HEA SU: BCY


BN-TG -- CL016 -- 3024 02/26/92 17:55 EST
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Date:Feb 26, 1992
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