Alliance Medical Holdings in bankruptcy, looks to avoid receivership

By Caroline Salls

Pittsburgh, April 12 – Alliance Medical Holdings, LLC filed Chapter 11 bankruptcy on April 7 in the U.S. Bankruptcy Court for the Southern District of Texas.

The company’s Chapter 11 petition said senior secured lender Zions Bank said on April 4 that it would seek appointment of a receiver for the company on April 5.

Alliance Medical said it would “attempt to dissuade Zions from filing an action for appointment of a receiver,” but its board of directors believed that the Chapter 11 filing was the company’s best alternative.

The company requested court approval to use the cash collateral of Zions First National Bank to fund its operations while in bankruptcy.

Alliance said it expects to need $8.9 million of the cash collateral to continue its operations in the next few weeks.

Under an interim order filed Tuesday, the cash collateral use will expire on April 18, on which date a second interim hearing will be held.

According to court documents, Alliance Medical has $50 million to $100 million in both assets and debt.

The company’s largest unsecured creditors are:

• Johnson & Johnson/LifeScan, with a $38.9 million claim;

• Roche, with a $33.41 million claim;

• West Virginia, with a $25 million claim;

• Kross Pharmaceuticals, with a $6.1 million claim;

• River City Pharma of Cincinnati, with a $3.64 million claim;

• American Express, based in Dallas, with a $2.14 million claim;

• Blupax Pharmaceuticals, LLC of Edison, N.J., with a $2.01 million claim;

• Highland Wholesale, LLC of Salt Lake City, with a $1.58 million claim;

• Auburn Pharmaceutical Co. of Cleveland, with a $1.57 million claim; and

• Strategic Products Group Inc. of Gulf Shores, Ala., with a $1.42 million claim.

Baker & Hostetler LLP is representing Alliance in its bankruptcy proceedings.

Alliance is a South Jordan, Utah-based pharmacy company. The Chapter 11 case number is 17-32186.

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