July 23, 2008 / 6:48 PM / 10 years ago

UPDATE 1-ProxyMed files for Chapter 11 reorganization

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NEW YORK, July 23 (Reuters) - ProxyMed Inc PILL.O, a medical information technology company that also operates as MedAvant Healthcare Solutions, filed for Chapter 11 reorganization on Wednesday and may sell its assets to private equity firm Marlin Equity.

The company, whose systems transmit medical data among doctors, hospitals, medical laboratories and insurance payers, said it plans to continue business as usual, helped by a debtor-in-possession financing commitment of $8.1 million by senior lender Laurus Master Fund Ltd.

“We believe this financial assistance will enable us to move through this process as quickly as possible so we may resume our focus on building a new, stronger company,” said Peter Fleming, MedAvant interim chief executive, in a statement.

In addition to the Chapter 11 filing in bankruptcy court in Delaware, ProxyMed filed a motion to sell its assets to Marlin. The proposal is subject to higher and better bids at an auction sale expected to be conducted in 8 to 10 weeks.

    In its court filing, ProxyMed listed assets of $15.7 million and debts of $19.5 million.

    Some of the company’s largest creditors include Cigna Corp (CI.N) and Aetna Inc (AET.N), according to the bankruptcy filing. (Reporting by Chelsea Emery; editing by Jeffrey Benkoe)

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