Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Cardiac Science Corp. Files for Chapter 11 Bankruptcy Protection

Author: Joel R. Glucksman

Date: November 25, 2015

Key Contacts

Back

Cardiac Science Corp. Files Chapter 11

On Oct. 20, Cardiac Science Corp., a major medical device firm known for developing and manufacturing automated external defibrillators, announced that it had filed for Chapter 11 bankruptcy protection. According to the Milwaukee Business Journal, the company sought bankruptcy protection after falling into insolvency with more than $87 million in debt.

Cardiac Science Corp. falls into debt after major changes

In bankruptcy documents, the company cited recent turmoil after its directors were removed and a litany of financial problems that arose due to a decline in sales. According to a report by the Milwaukee Journal Sentinel, Cardiac Science Corp. stated that it holds liabilities between $100 million to $500 million against assets in the range of $10 million to $50 million.

The company also noted that it owes $8.7 million to CFS 915 LLC, one of its primary secured lenders. After the loan went into default status, CFS removed the company’s executive board and appointed new directors. In turn, CFS then filed a lawsuit against Cardiac Science for the balance of the outstanding debt. Further, Cardiac Science had also been in default status for over two years with HDFC Bank Ltd. of Mumbai, India for its $6.3 million loan.

Currently, the company has several unsecured creditors, which most notably include Celestica Electronics of Malaysia for $2.5 million, Patterson Thuente Peterson Intellectual Property of Minneapolis for $440,411 and Saft America Inc. of Valdese, North Carolina for $388,460.

One day before the company filed for Chapter 11 bankruptcy protection, its new executive board petitioned to have Criticare Systems Inc. – Cardiac Science’s sister company – put into receivership in the Waukesha County Circuit Court. The board felt that insolvency was imminent for Criticare Systems, and thus filed the petition as a way to position the company for liquidation, with the proceeds of the asset sales to be paid to its creditors.

Cardiac Science’s reorganization plan calls for sale

Prior to its Chapter 11 filing, the Cardiac Science Corp. laid off 15 high-level employees in an effort to lower its costs. However, in its bankruptcy documents, the company stated that it does not intend to conduct more layoffs because it plans to seek a quick sale as an ongoing business. This sale process will be held in a supervised bankruptcy court auction, with CFS acting as the stalking horse bidder. Although CFS has also reached a purchase agreement with Cardiac Science, the auction will be open to competitive bids.

CFS has agreed to provide debtor-in-possession financing to Cardiac Science to ensure that business operations continue uninterrupted. This funding is intended to guide the company through the bankruptcy period until it is sold, with the intention of it emerging from reorganization as a viable business. In turn, the debtor-in-possession financing will enable the company to continue making payments for employee wages and benefits packages as well as goods and services from vendors.

Are you a creditor in a bankruptcy?  Have you been sued by a bankrupt?  If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Tariff Response Options for Small Businesses Facing Financial Distress post image

Tariff Response Options for Small Businesses Facing Financial Distress

The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]

Author: Brian D. Spector

Link to post with title - "Tariff Response Options for Small Businesses Facing Financial Distress"
Common Causes of Partnership Disputes and How to Resolve Them post image

Common Causes of Partnership Disputes and How to Resolve Them

Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]

Author: Christopher D. Warren

Link to post with title - "Common Causes of Partnership Disputes and How to Resolve Them"
President Trump's Termination of Member Gwynne Wilcox post image

President Trump's Termination of Member Gwynne Wilcox

On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]

Author: Matthew F. Mimnaugh

Link to post with title - "President Trump's Termination of Member Gwynne Wilcox"
How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide post image

How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide

Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]

Author: Christopher D. Warren

Link to post with title - "How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!