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TLC Vision files for bankruptcy in US, Canadian courts
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TLC Vision Corp. and two subsidiaries have received a U.S. court order granting financial relief under Chapter 11 of the U.S. Bankruptcy Code, the company announced in a press release. TLC also sought recognition of its Chapter 11 filing in a Canadian provincial court.
In addition, TLC reached an agreement with a majority of senior secured debt holders to restructure its financial balance sheet.
The U.S. Bankruptcy Court for the District of Delaware granted relief to TLC and wholly owned subsidiaries TLC Vision (USA) and TLC Management Services. The court approved the use of $7.5 million of a $15 million debtor-in-possession financing facility; continued payment of wages, salaries and employee benefits; and authority to use the company's cash collateral. TLC also secured sufficient relief to pay some key vendors in full.
TLC sought recognition of its Chapter 11 filing in the Ontario Superior Court of Justice under the Canadian Companies' Creditors Arrangement Act. As a result of the filing in Ontario, the Toronto Stock Exchange suspended trading of TLC common shares and will delist the shares effective at the close of the market on Jan. 21. TLC also received notification from the NASDAQ Global Market that its common shares will be delisted at the opening of business on Dec. 28.
Under the agreement with its senior debt holders, TLC will convert a portion of debt encumbrance to 100% of the new equity TLC Vision (USA). The company will emerge from bankruptcy a privately held entity, the release said.
"This proceeding will enable us to continue providing our surgeons and eye care professionals with the tools, technologies and services they need to deliver high-quality patient care," Jim Tiffany, TLC Vision president and COO said in the release. "After evaluating a number of strategic alternatives with our board of directors and advisors, we decided that restructuring our debt through court protection was the best way to preserve the value of our business. We expect to emerge swiftly from Chapter 11 with a stronger balance sheet and able to better capitalize on our industry leadership position."