HDL Wins Approval to Put Itself Up for Sale
Monday, July 20, 2015
Health Diagnostics Laboratory, Inc. (HDL, Inc.) recently filed a motion with the United States Bankruptcy Court for the Eastern District of Virginia seeking the court’s authorization to conduct a sale of its business under Section 363 of the Bankruptcy Code. HDL Inc. intends to continue normal operations throughout the sale process, which is expected to maximize the value of the company and provide a platform for future growth.
According to the Richmond Times Dispatch, a U.S. Bankruptcy Court judge has since approved procedures for the blood-testing company’s request to sell itself through a court-monitored auction process. The judge also granted the company’s motion to question a major health insurer under oath about unpaid claims.
HDL says it has interested suitors, but no potential buyer has been identified. The company plans to solicit bids through Sept. 4, hold an official auction Sept. 10, and have a hearing held Sept. 16 to receive court approval of the sale, according to court filings. HDL has said in court filings that it was moving forward “expeditiously” with the sale process to preserve the value of the business.
HDL is also seeking to reduce the amount of space it leases in its downtown office and laboratory building in the Virginia Biotechnology Research Park campus — space that is expected to be occupied by Virginia Commonwealth University. Operating under Chapter 11 bankruptcy protection since early June, HDL filed a motion with the U.S. Bankruptcy Court in Richmond to enter into an amended lease agreement. The building is owned by an entity called Biotech 8 LLC, a joint venture in which HDL itself holds a 58.9 percent stake.
The company said the reduction in rented space would result in an annual savings of about $1.55 million. That includes a reduction in rental payments of about $91,174 per month, along with about $21,974 per month for operating expense costs, about $11,907 for electricity costs, and about $4,048 per month for parking rent.