Medical Staffing Network bankrupt, lenders to buy co

BANGALORE/DELAWARE (Reuters) - Medical Staffing Network Holdings Inc MSNW.PK, one of the largest providers of temporary healthcare staff in the United States, said it agreed to sell itself to its secured lenders for $84.1 million and filed for Chapter 11 protection in a Florida court.

The purchase price will be paid by the lenders credit bidding the amount of first lien debt due to them, the company said in a statement Tuesday.

The Boca Raton, Florida-based company is the largest U.S. provider of "per diem" healthcare staffing, or those assignments of two weeks or less, and one of the top three providers of traveling nurses, according to court documents.

On any given day, the company has 3,000 healthcare staff working from its pool of about 19,000 available workers.

The company said it sought court approval of a $15 million debtor-in-possession loan to continue operations while in bankruptcy.

The deal is subject to higher and better bids and is expected to close before August 31.

In its Chapter 11 petition filed on Friday, Medical Staffing Network listed both assets and liabilities in the $100 million to $500 million range.

The company said in court documents that hospitals are cutting the use of temporary healthcare workers due to the sluggish U.S. economy and placing greater emphasis on using existing full-time staff, undermining the company's business.

Medical Staffing Network's revenue's fell to $340.9 million last year from $537.8 million in 2008. The company reported losses of $148.3 million over the last two years.

High unemployment and cash-strapped governments have forced changes in the way healthcare is delivered and funded, forcing several hospitals and healthcare providers to file for bankruptcy this year, including such well-known institutions as St Vincent's Hospital in Manhattan.

In a separate court filing, the company said Warburg Pincus Private Equity VIII LP owns more than 45 percent of its stock.

The case is In re: Medical Staffing Network Holdings Inc, U.S. Bankruptcy Court, Southern District of Florida, No:10-29101.

(Reporting by Santosh Nadgir in Bangalore and Tom Hals in Delaware; Editing by Maju Samuel)