Clinical documentation and transcription vendor Spheris announced today that it has filed Chapter 11 bankruptcy in order to allow MedQuist and CBay, companies owned by CBaySystems Holdings LTD, to purchase its assets. Bids from other interested parties will be accepted, however. Spheris India is part of the transaction, but will not file bankruptcy.
Robert Butler, Chief Restructuring Officer of Spheris, stated, "Throughout the past year, Spheris has taken steps to strengthen its operations and customer service, and these initiatives are achieving solid results. Spheris has also been engaged in constructive discussions with certain key constituents of the Company to identify ways to enhance financial flexibility for our operations. We expect customers will continue to receive high-performing services through a company with a stronger capital structure."
Cracker predicted this action on December 9 on HIStalk:
From Cracker: “Re: Spheris. Warburg Pincus is looking to unload its albatross Spheris stake to CBay Systems, the largest medical transcription company in the US since their purchase of MedQuist in 2008. Spheris, second largest, recently ended a three-year run as a quasi-public company — public debt, not public stock. Uncompetitive technology and a heavy debt load handicap Spheris as medical transcription prices fall.”
We reported on December 17:
Daniel J. Kohl resigns as CEO of the struggling Spheris, a medical transcription service company. The company reported a 15% drop in revenue the first half of the year and ended its registration with the SEC in November. Likely adding fuel to the fire was the company’s poor showing in last week’s KLAS report on medical transcription service vendors. Amid customer complaints that Spheris was unable to resolve quality and technology issues, the company was ranked last in a field of 15.