The doors are closed and the lights are off. Now work begins to sell off the remaining assets of the Laser Spine Institute, with any proceeds going to the creditors responsible for shuttering the financially flailing company earlier this month.
Soneet Kapila, managing partner of the KapilaMukamal insolvency consulting firm, has been appointed Laser Spine's "assignee" as part of an insolvency process called "assignment for the benefit of creditors." Similar to a federal bankruptcy filing, it gives Kapila the task of assessing all equipment and other materials Laser Spine owned or controlled and deciding what is valuable enough to sell.
Unlike a bankruptcy filing, assignment for the benefit of creditors is a voluntary process outlined in a state statute, Kapila said. Laser Spine officially filed for assignment of benefit on March 14.
"At the end of the day, it is my function to find value for the creditors. There is no real estate in this case, but I am evaluating other assets," he said.
He also is required to report any fraud or other illegal activity he might uncover while sorting through the assets.
The Laser Spine Institute closed abruptly March 1, stunning patients and employees in Tampa Bay and beyond. A statement by Laser Spine's CEO, Jake Brace, said the institute's banks "precipitously and surprisingly made the decision to freeze the company's accounts and strip the cash out of these accounts."
The action, he added, took away the institute's "operating flexibility," and efforts to find other financing failed.
With a strict deadline by the banks to find a new investor, there was no time to file for bankruptcy protection, said Kathleen Donald, a company spokeswoman. "Even filing for bankruptcy requires some cash and some time. So it was not a viable option," she said.
The CEO's statement makes no mention of what might have caused the banks to take action. But Laser Spine, known for its minimally invasive spinal procedures, was embroiled in several lawsuits and faced challenging headwinds as the health care landscape continued to evolve.
Over the last 25 years, Kapila's firm has returned millions of dollars to creditors, including in the high-profile insolvency cases of Adinath Corp., Simply Fashion Stores, Universal Health Care in Tampa, and record producer Louis Pearlman.
Kapila said the Laser Spine Institute is unique in that the business shuttered so abruptly, and it will likely take months to wade through all physical assets and intellectual property, like patient databases and other digital sources of information.
"We have some journey to travel," he said. "Laser Spine was a large business with very specialized equipment."
As for patients who were still making payments on costly medical procedures, creditors will soon take over those accounts and be reaching out with instructions on how to continue to pay, Kapila said.
"There is a team in place which will pursue those collections, as they are legitimate assets of the company," he said.
Meanwhile, a reduced staff at Laser Spine is reaching out to patients to help them find continued care with other physicians.
In addition to its Tampa office, the institute also has closed its locations in Ohio, Arizona and Missouri.
Contact Justine Griffin at email@example.com or (727) 893-8467. Follow @SunBizGriffin.