On May 11, 2010, Chem Rx Corporation ("Chem Rx" or "Debtor"), filed petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware. Based in Long Beach, New York, Chem Rx claims to be the third largest long term care pharmacy in the United States (a link to the company's website is available here). Chem Rx's customers include nursing homes, group homes, correctional institutions and other long-term care facilities. The company sells both prescription and non-prescription drugs, medical equipment and surgical supplies to institutions in New York, New Jersey, Pennsylvania and Florida. See Chem Rx's Declaration in Support of Chapter 11 Petitions and Request for First Day Relief (the "Declaration") at *2.
Background
As stated in its Declaration, Chem Rx was founded in 1958 as a retail pharmacy in New York. By growing internally, and making certain acquisitions, Chem Rx grew to be the third largest long-term pharmacy in the U.S., behind Omnicare, Inc. and PharMerica Corporation. The Debtor operates under four subsidiaries, each licensed in a separate state. Acting primarily as a distributor, Chem Rx purchases pharmaceuticals in bulk and re-sells the product in response to physician orders.
Events Leading to Bankruptcy
Here is a link to the actual, Declaration Filed May 11, 2010, it’s a great read as it list events leading to this filing.
The Buy out Agreement
The 8-K filed with the SEC confirming the buyout offer
The 8-k High Lights
· Under the terms of the Agreement, the Company has agreed, absent any higher or otherwise better bid, to acquire the Assets from the Seller for $70,600,000 in cash plus the assumption of specified liabilities related to the Assets.
· PHARMERICA MAKES BID TO ACQUIRE CHEM RX CORPORATION
· LOUISVILLE, Kentucky (September 27, 2010 ) – PharMerica Corporation (NYSE: PMC), a national provider of institutional pharmacy and hospital pharmacy management services, today announced that it has signed an asset purchase agreement to acquire substantially all of the assets of Chem Rx Corporation for $70.6 million. The acquisition is subject to the approval of the Bankruptcy Court and Chem Rx not receiving a higher offer from a third-party through a Court-approved auction process. PharMerica intends to pay the purchase price with existing cash and borrowings under its revolving line of credit.
· What does PhamMerica Gain by Being designated as the, “Stalking Horse”
· If the Bankruptcy Court approves the Agreement and the Agreement is later terminated for certain reasons, including because the Seller enters into a competing transaction, the Seller may be required to pay the Company a termination fee equal to $1,412,000.
PharMerica-Chem Rx deal gets antitrust clearance
Chem Rx's Bidding Procedures, Breakup Fee OK'd
http://www.law360.com/registrations/user_registration?article_id=199696&concurrency_check=false
Law360, New York (October 07, 2010) -- A bankruptcy court judge has approved bidding procedures for Chem Rx Corp. that include a 2 percent breakup fee, putting more weight behind PharMerica Corp.'s $70.6 million bid for the pharmacy chain.In a Wednesday order, Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware also set an Oct. 29 auction date and Nov. 2 sale hearing.
Facts
A stated in the Declaration filed on May 11, 2010, in the United States Bankruptcy Court for the District of Delaware, there are approximately 14 million shares of outstanding common stock.
Jerry Silva the CEO and founder of the Company, and Steven Silva and their affiliated trust own 52% of the 14 million shares of the outstanding common shares.
The Auction Date is October 29 and the Sale hearing is November 2nd, 2010.
~Story Developing~
