Imagyn Medical Technologies Inc. wants a judge to reject creditors' bids to liquidate the struggling medical-device maker, allowing the company instead to reorganize in bankruptcy court and pay off more than $160 million in bond debt.
Imagyn executives filed papers Tuesday in U.S. Bankruptcy Court in Wilmington, Del., to convert its creditors' bankruptcy petition to a Chapter 11 bankruptcy reorganization that would allow the company to come up with a plan to regain profitability.
The bankruptcy filings, which listed $94.3 million in assets and $189.5 million in debts, came after Imagyn, maker of surgical products used to treat gynecological and urological problems, failed to make $8.8 million in interest payments last month.
Officials of Turnberry Capital Partners, owed more than $6.4 million from Imagyn, filed to liquidate the company May 4 to pay off their own and other bondholders' claims.
Imagyn officials countered that they've been in negotiations with their main creditors to restructure the company's finances through a speedy bankruptcy reorganization. Five of Imagyn's units also filed Tuesday for Chapter 11 protection from creditors.
Slumping sales and a cash shortage prompted Imagyn last year to sell its line of impotence treatment products to Timm Research Co. for $25.8 million. The sale was part of a last-ditch effort to cut costs and raise revenue to keep the company afloat.
Imagyn shares on Tuesday fell a penny to 11.5 cents.