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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 ...

Holy crap ... - anon

[ In Reply To ..]
None of us can really say we didn't see this coming ... manohman ...

Holy Moly - Yep

[ In Reply To ..]
This was so inevitable to happen, I am surprised it took this long. Guess they had to wait until the new year. As a former Spheris employee who also went BR, it is a scam for them to protect their money and dump their debt. I don't believe they are in that kind of financial trouble at all. Another way for the higher ups to take the money and run. Of course, everyone else from the neck down suffers. I bet they restructure or get bought out, like MM bought Spheris. Again, the employees will suffer! What a shame, what a filthy company.

They are definitely taking the money and running IMO. - sm

[ In Reply To ..]
This is a highly profitable business, not to mention the amount they're making by using Indian labor. There's no way they could run it in the ground if they had any business sense at all. They're just too greedy & taking too many bonuses IMO. I hope the ones who milked all the money out never work in business again & that whoever they apply with will see what they've done to this industry, laughing all the way to the bank. They've ruined an entire industry and put so many people out of work, ran the small MTSOs out of business, sent so many accounts overseas where there's no HIPAA, and then just take the money off the top and file bankruptcy?! It's sickening.

Oh no, they won't have to work another day in their lives - MME

[ In Reply To ..]
When this ship sinks, they'll be sipping drinks on a Bahamas beach at sunset ... they won't have to work another day in their lives. That's what they've been working toward all these years, it's what the Administrations of ALL the largest companies work toward.

Yep - yes

[ In Reply To ..]
FILTHY does not begin to describe it. I have a word for them, but if I used it on here, I would be banned. (It starts with a B-A-S........)

Die already - Evelyn

[ In Reply To ..]
Will this mean the end of MM? I seriously doubt it. They'll find a way to continue to nickel and dime us, send our work to India and fail our audits.

Probably not as "MModal" though ... - anon

[ In Reply To ..]
Time for another "rebranding" ...

I'd love to read the article but I'm not willing to subscribe - MME

[ In Reply To ..]
Is there any way to read it without the obnoxious "To read the full article, subscribe" box covering up the entire text? It seems kind of important :(

Article - sm

[ In Reply To ..]
"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

I'll bet $20.... - FooledMeTwice

[ In Reply To ..]
that Nuance buys out Mmodal when the dust settles; seems like they're snapping up companies as fast as they can in an effort to monopolize the market. I heard they were competing with Apple to get control of Dragon but don't know if that was true or not.

No one in their right mind would ever buy out a company with this much debt - anon

[ In Reply To ..]
It would be a *seriously* bad investment for Nuance or anyone else. They would have to assume some or part of MModal's bad debt and there's waaaay too much of it now.

The case can't even be made that Nuance would be interested in our accounts because they're all going away too, either to other companies or to other technologies.

Nuance is already leaps and bounds ahead of MModal for its speech recognition technology, they're the developers of Siri, after all ... I can't imagine under the sun what benefit MModal would ever have for Nuance unless Nuance is interested in assuming a boatload of debt and inferior technology.

BuyingOldTechnology - KindredSpirit

[ In Reply To ..]
It's a gamble when they buy a company that has 10 to 12-year-old platform technology. It cannot just be changed over with a magic wand. It no doubt takes a lot of expertise, something that seems to missing in the equation these days.

text of WSJ article - anon

[ In Reply To ..]
First of all, from reading this it sounds as if restructuring plans have already been made with the creditors and that although they are filing for bankruptcy, they will continue. I could be interpreting this incorrectly, here is the article:

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

Thank you for posting the text ... that was very helpful - anon

[ In Reply To ..]
This is not good for us employees, at ALL.

If they're only interested in the software end of things it could be that the Development division of MModal stays intact while the rest of it goes away.

99% of all companies that file bankruptcy never emerge from it. I think this is the ringing of the final bell for us as employees, and for MModal as a company.

guess who'll come out smelling - like a rose

[ In Reply To ..]
Oh I don't have to tell you. You already know.

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