External Defibrillator Manufacturer Files Chapter 11 Petition for Debt Restructuring

by San Antonio Attorney

Cardiac Science Corporation, an external defibrillators (AEDs) manufacturer based in Wisconsin, announced to the public today about its recent filing for voluntary petition under the Chapter 11 United States Bankruptcy Code. The filing was initiated by the company’s new set of directors. They will reorganize the Cardiac Science business operations and at the same time restructure its debt.

The company aims to work with its constituents with the primary goal of smooth exit in bankruptcy while consummating a good sale at the same time.

Cardiac Science’s existing secured lender has agreed to provide a ‘debtor-in-possession’ financing for the purpose of maintaining business operations without interruption. But this agreement is still subjected to approval of the Bankruptcy Court.

This funding, along with a projected cash flow from operations, will be funding Cardiac Science’s operations during the bankruptcy process. Customers and vendors will not be affected especially with their day-to-day operations..

Cardiac Science filed a motion seeking authorization to pursue a sale process under Section 363 of the U.S. Bankruptcy Code. With this move, the company plans to enter into an acquirement agreement with its secured lender as a ‘stalking horse bidder’.

Cardiac Science also asked the Court for authorization to maintain the salaries and benefits of their employees without interruption and they will expect the Court to grant that request. While the petition for Chapter 11 is still in process, vendors will be paid for post-petition purchases of goods and services, following the original course of business. The company also sought court permission to carry on with its customer policies. This is done so that Chapter 11 process will bear no impact to customers. Courts usually grant these requests because this serves to protect the welfare of the customers and employees.

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