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Medical Staffing Network Holdings Inc. (OTCBB: MNSW.PK), which earlier this year warned it may face bankruptcy, set up an escrow account to handle VMS payments, according to a filing with the U.S. Securities and Exchange Commission.
The Boca Raton FL-based healthcare staffing firm and vendor management system provider said it took the action to bring a measure of comfort to its VMS clients and subcontractors. In the past two years, other VMS providers had run into financial difficulty and left monies unpaid.
Medical Staffing Network Holdings said it hasn't failed to make any payments due to its VMS subcontractors because of financial challenges.
The company said it is using CBIZ Goldstein Lewin as its escrow agent.
Medical Staffing Network Holdings also said it extended a forbearance agreement with lenders. The company had gone into default with its first-lien lenders, and the newly extended forbearance agreement prevents the lenders from taking action until June. However, the company said it continues to discuss restructuring, and may still file Chapter 11 if a deal with lenders cannot be reached.
In April, the company said it hired Mohsin Meghji of Loughlin Meghji + Company, to serve as chief restructuring officer.