TLC Vision seeks bankruptcy protection during reorganization

January 15, 2010

TLC Vision Corp. has won U.S. bankruptcy court approval for a restructuring of its debt.

St. Louis, MO-TLC Vision Corp., a leading North American eye-care services company, has won U.S. bankruptcy court approval for a restructuring of its debt.

The company announced Dec. 21 it had filed petitions under Chapter 11 of the U.S. Bankruptcy Code and under the Canadian Companies' Creditors Arrangement Act. Subsidiaries TLC Vision (USA) Corp. and TLC Management Service Inc. also filed for bankruptcy protection in the Wilmington, DE, court.

On Dec. 23, the company said courts in the United States and Ontario approved the pre-arranged restructuring agreement the company reached with its senior secured lenders. TLC Vision's parent company is based in Mississauga, Ontario. U.S. corporate headquarters is in Chesterfield, MO.

The bankruptcy proceedings do not affect any other company operations, affiliates, or subsidiaries, including TLC Laser Eye Centers or the company's Refractive and Doctors Services business lines, according to company spokesman Stephen Phillips.

"This is a financial event, not an operational one," he said. "Business is continuing as usual."

Phillips said the company was no longer able to meet its financial obligations because the recession caused patients to delay elective laser vision correction procedures. TLC Vision reached agreements with its lenders before filing for bankruptcy protection to shorten the reorganization process, which Phillips said should be completed early this year.

Under the bankruptcy plan, the company gained approval to use $7.5 million of a $15 million debtor-in-possession financing facility, and the company may use its cash collateral, TLC said in a prepared statement. All employees and vendors are being paid as usual, Phillips said. TLC shareholders are not guaranteed any disbursements.

The April resignation of Chief Executive Officer Jim Wachtman to "pursue other interests" and the hiring of a chief restructuring officer was not a sign that Chapter 11 bankruptcy proceedings were imminent, Phillips said.

"The company explored a number of ways to restructure its debt and, after months of negotiations, the company and lenders decided this was the best way to preserve the value of the company," Phillips said.