Yesterday, one of the
largest healthcare staffing firms in the nation, Medical Staffing Network Holdings Inc., warned investors that it could
file for Chapter 11 in bankruptcy court to fend off its lenders from
enforcing a default. MSN also stated that they are continuing
with lenders over a default.
MSN’s filing with the Securities and Exchange Commission on Wednesday, said it has been
out of compliance with the terms of its first lien credit agreement with General Electric Capital Corp.
since Dec. 27. MSN’s situation was exacerbated by a significant drop in their 2009 revenue.
As of today, Medical Staffing Network has yet to report its full 2009 results. However, in 2009 MSN lost $20 million of revenue in
the first three quarters, on revenue of $265.2 million. This was a 37% decline in sales from the same period in 2008.
“The company believes that based on currently projected cash inflows
generated from operations, it is possible that the company may be unable
to pay future scheduled interest and principal payments due to its
senior lenders as such obligations become due,” Medical Staffing Network
stated in the SEC filing.
Boca Raton FL-based Medical Staffing Network Holdings ranked No. 4 on
Staffing Industry Analysts’ list of largest healthcare staffing firms.
Medical Staffing Network also runs a Managed Services Program (MSP) called One Source. Hopefully the staffing suppliers that subcontract with them have their money secured with an escrow account. It would be incredibly detrimental to the industry to have yet another VMS/MSP go bankrupt and leave their staffing suppliers with millions in owed revenue.