New England Orthotic and Prosthetic Systems (NEOPS), headquartered in Branford, Connecticut, has filed for Chapter 11 bankruptcy. The company has 21 locations in Connecticut, Rhode Island, New York, Massachusetts, and New Hampshire.
David Mahler, president and CEO of NEOPS, told the New Haven Register that the company’s senior debt has been acquired by the owner of an O&P company based in Long Island, New York, which he declined to identify. According to Mahler, the individual who purchased the senior debt expects to merge his company with NEOPS this year. Senior debt holders are paid before unsecured creditors.
The company was forced to file for bankruptcy protection because the private equity firm that recapitalized the business in May 2012 “over-extended us,” Mahler told the newspaper. “That, along with some regulatory changes governing the industry, led us to make the Chapter 11 filing,” he said.
Under federal bankruptcy laws, Chapter 11 allows a company to keep operating while its owners seek to restructure their debt. According to the Chapter 11 filing, NEOPS has fewer than 50 creditors. The company has a book value of $19.3 million, including $11.8 million of intangible assets and liabilities of approximately $17.3 million.
