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Medical Staffing Network Holdings Inc. (OTCBB: MSNW.PK) announced plans to file for Chapter 11 bankruptcy protection and be acquired by its first lien lenders, according to a filing with the U.S. Securities and Exchange Commission.
The Boca Raton FL-based company ranks as one of the largest healthcare staffing firms and operates the OneSource vendor management system. The company had revenue of $340.9 million in 2009, down 36.6% from the previous year.
A deal to restructure the firm was struck on June 9 with the Medical Staffing Network's first lien lenders and 95% of its second lien lenders, according to the filing.
The deal calls for Medical Staffing Network Holdings to file for Chapter 11 by June 28. Plans then call for first lien lenders to bid to acquire the company using their first lien debt as consideration. The firm doesn't anticipate any value will remain for holders of its common stock after the deal.
Medical Staffing Network owes its first lien lenders $95.1 million and its second lien lenders $25.2 million.
In addition, General Electric Capital Corp. and the first lien lenders agreed to provide Medical Staffing Network with $15 million of debtor-in-possession credit.
The company also announced plans to deregister its common stock, after which it would no longer be required to file 10-K and 10-Q forms with the SEC.
Medical Staffing Network first announced in March that bankruptcy might be a possibility after a default on debt. In May, it announced an escrow account to handle VMS payments, according to a filing with SEC. The company said in April it hired Mohsin Meghji of Loughlin Meghji + Company, to serve as chief restructuring officer.