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M*modal files for bankruptcy - crystal ball

Posted: Mar 08, 2014

Wall Street Journal

M*Modal Preparing to File for Bankruptcy

M*Modal is in discussions with its creditors on a prearranged restructuring plan that would streamline its trip through bankruptcy court, these people ...

Whole Article........ - smeeps

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A medical services company owned by a J.P. Morgan Chase JPM +0.85% & Co. private-equity arm is preparing to file for bankruptcy protection in the next two weeks as it struggles under a hefty debt load and declining sales, people familiar with the matter said.

M*Modal is in discussions with its creditors on a prearranged restructuring plan that would streamline its trip through bankruptcy court, these people said. The bankruptcy negotiations come about 18 months after One Equity Partners took the company private through a leveraged buyout.

Some creditors, including Brigade Capital Management LLC, Blackstone Group BX +0.96% LP's GSO Capital Partners and Fidelity Investments, are negotiating with the company to swap their debt for equity in the reorganized company, they added.

The discussions are ongoing, and the goal is to file by about mid-March, when a grace period for a February missed bond payment expires, two of the people said.

At the time of the missed payment, the company said it was engaged in discussions with some lenders and bondholders to reduce its debt. "We believe these discussions have been constructive," M*Modal Spokesman Joe McNamara said in a Feb. 19 statement.

M*Modal transcribes doctors' voice recordings and develops voice-recognition software for the medical industry. Some creditors hope the company's restructuring will put it in a position to grow the voice-recognition software part of the business, one of these people said.

One Equity tapped its latest buyout fund for the $447 million it put toward the $1.1 billion purchase, according to securities filings. As M*Modal's financial situation deteriorated last year, One Equity gave the Franklin, Tenn., company another $20 million, according to credit analysts. J.P. Morgan has said it is spinning off One Equity as an independent firm.

M*Modal has about $750 million in debt, according to securities filings and credit-ratings firms, close to three times what it carried before the August 2012 buyout.

Moody's Investors Service and Standard & Poor's Ratings Services each downgraded M*Modal deeper into junk territory this year as the company's results weakened.

The Wall Street Journal reported in January that the company and some of its creditors were working with restructuring advisers.

M*Modal was founded in 1998 and grew through acquisitions. Sales jumped tenfold between 2006 and 2009. In 2010 revenue was about $415 million and the company, then known as MedQuist Holdings Inc., sold stock the next year in an initial public offering at $8 a share. The company changed its name to M*Modal the following January, and it agreed to the buyout, at $14 a share, in July.

M*Modal's main business is transcribing doctors' voice recordings. One Equity believed that the introduction of new voice recognition technology would boost sales, people familiar with the matter have said.

The company's rollout of new technology hasn't yet brought much profit, though, and its regular line of business has come under pressure from abundant technologies that turn speech into text on the spot and adoption of electronic health records, credit analysts say.

Write to Emily Glazer at emily.glazer@wsj.com

Here's hoping - OldsterMT

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Maybe there's hope that all these bastards that continually made crappy business decisions, undercut/gouged pricing, and kept buying out every "mom and pop" business, cheated it's workers out of income every chance, and multitudes of other dirty deeds may finally get what they deserve.

I certainly don't wish anything bad for the workers, but I hope the businessmen and investors take a huge hit in their wallets. They deserve to know what the workers have been through that have been screwed over repeatedly.

HOPING... - gltrgrami

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Amen!! Very well said!! What goes around comes around.

I hope it doesn't give them protection from - (sm) - keypounder

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paying unemployment to any MTs it lays off because of "restructuring", because that would suck.

M*MODAL BANKRUPTCY - MT OPINION

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Just saw an article. M*Modal revenue $490M and debt $750M. This means $250M of unsecured debt will get wiped out still leaving them with $500M of debt greater than their revenue. Biggest problem in debt wipe off if subcontractors and suppliers are owed they will not get paid. God forbid if those Indians do not get paid because they will post patient records on the Internet. That is what happened a few years back with University of SFO.

Hope everyone working for M*Modal comes out okay.

Bankruptcy - Toni

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"...owned by J.P. Morgan-Chase" Didn't have to read any further than that. Banksters!

Probably a stupid question but I don't come here much (sm) - Old and Tired

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but isn't M-Modal the old Medquist? There are so many buyouts and mergers I get confused. Or was it Nuance? I note they have their own board, so I assumed that meant they were big?

who is M-Modal - OldsterMT

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Yes, M-Modal was Medquist. M-Modal has evolved from multiple mergers. Medquist was originally a combination of SecrePhone and Transcriptions Limited (?). Medquist then swallowed up all sorts of smaller companies, including YOG. There have been so many it has become hard to determine who is who.

Remember that it was Medquist that got caught shorting the MTs line counts, then made a deal through what was then called AAMT (changed their name since), so that instead of paying the MTs what was owed them, we could have had AAMT benefits instead.

Ahhh.. Thanks for answering. I'm remembering some of it now. - I used to work for TL in the OLD days

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nm

Oldster MT - Rachel

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I was one of those folks who got knifed by Medquist on the line count deal. I refused to take the tidbit offered by what was then AAMT, as I regard AAMT to be as corrupt as MQ was. Just saying. You know that old saying: The GOLDEN RULE is that those who have the gold make the rules. It sure was true in this case.

M*Modal Bankruptcy - Bankruptcy Secretary

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It looks as if they are trying for Chapter 11 whereby the creditors get screwed. In short, creditors have to agree to take a pittance of what they are owed or get nothing. This is not a new tactic for these greedy corporations. They do it all the time, stay in business, and keep getting richer off the backs of others.

Does that also apply to not paying unemployment? - Keypounder (nm)

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Re unemployment - Bankruptcy Secretary

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Hopefully they have been paying in. See this informative site.
http://thelawdictionary.org/article/collecting-unemployment-when-company-goes-bankrupt. Chapter 11 does not take them out of business, it just screws the creditors. If they do go totally bankrupt, they can just form a new company and do it all over again.

Medquist Bankruptcy - NM

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Not sure what to think about MModal. I started with Medquist and they were a good bunch of people, but they changed so much. In the end I felt I had been taken advantage of with slave wages. The best of luck to you all.

So they're going bankrupt - Nick

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It couldn't happen to less nice guys (and you can be sure they are guys). But the thing that makes me sad is that the in-the-trenches MTs are going to get, well you know, just like the creditors. The creditors will all line up at Bankruptcy Court and likely settle for ten cents on the dollar. I have always held MM in very low esteem and now it is even lower. Good luck to anyone out there who works for MM.

M-Modal going under! - old Medquist/Medtranner

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I certainly hope it is a painful experience. They bought up all the great little companies, cheated the employees and then spit them out. I am sorry for anyone who is still with them - it will give them another opportunity to cheat you some more. I'm sorry I have no faith after what I've seen in the past 13 years.

M-Modal going under! - Old Pro

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Well, MQ ate me up and spit me out years ago. Other California MTSOs, too, those of us who actually cared about people. I do not believe in revenge, but I sure like the sound of the word "karma."

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