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CLEARWATER, Fla., -- Maxxim Medical, Inc., a Texas corporation, and its domestic affiliates, announced today that they have reached agreement with certain of their bank lenders on a $20 million debtor-in-possession financing facility and, with the support of these lenders, have sought relief under Chapter 11 of the U.S. Bankruptcy Code to reorganize and implement a balance sheet restructuring. The filing was made in the U.S. Bankruptcy Court for the District of Delaware.
"Although Maxxim is organizationally sound, with operations that generate operating income, the Company has an excessive level of debt," says Thomas R. Cochill, president and CEO. "We anticipate that the proposed restructuring, with the support of key lenders, will allow us to reorganize with no adverse impact on the company's day-to-day operations."
Cochill notes that Maxxim intends to provide customers a full level of service and that the Company does not anticipate interruption in the flow of products and services. "We intend to conduct business as usual," he says.
Maxxim was purchased in a leveraged buyout transaction in November 1999, a transaction that was largely financed by debt. Due to the company's high debt load, Maxxim has been in discussions with its banks to take action to reduce the debt. These discussions have resulted in an agreement on debtor-in-possession financing and the Chapter 11 filing.
The anticipated reduction in the company's debt service burden should significantly enhance management's flexibility to compete effectively over the long term through greater productivity, innovation and responsiveness to customer needs, according to Cochill. "We anticipate this should result in a new Maxxim that will be a stronger competitor in the marketplace going forward," he says.
Maxxim Medical is a major diversified manufacturer, assembler and marketer of specialty medical and surgical products including customer procedure trays, single-use drapes and gowns, medical and surgical gloves, vascular access and critical care products. Selling primarily to acute-care hospitals, surgery centers and alternate care facilities, Maxxim has six plants in the United States and one in the Dominican Republic.