In the IMRIS, Inc. bankruptcy proceeding (Delaware Bankruptcy Case No. 15-11133), a formation meeting has been scheduled for Thursday, June 4, 2015 at 10:00 a.m. (ET) at the J. Caleb Boggs Federal Building, 844 King Street, Room 2112, Wilmington, DE 19801.  Click Here for a copy of the Notice of Formation Meeting for Official Committee of Unsecured Creditors issued by the Office of the United States Trustee.  If you want to be considered for Committee membership, you MUST complete a questionnaire and return it to the U.S. Trustee no later than June 2, 2015 at 5:00 p.m. (ET).

According to the Declaration of Jay D. Miller in Support of First Day Pleadings (the “Declaration”), IMRIS came into existence after acquiring Innovative Magnetic Resonance Imaging Systems Inc. in 2005.  IMRIS trades on the NASDAQ under the ticker “IMRS”.  The Debtors design, manufacture and market image guided therapy systems that enhance the effectiveness of therapy delivery, which include multiple field strength Magnetic Resonance systems, X-Ray Fluoroscopy systems, and Computed Tomography (CT) systems.  The Debtors’ products are installed in leading neuroscience centers around the world.  Declaration at *4.

The Debtors had a complex billing cycle as the installation of their products required substantial capital contributions be made by their clients.  Ultimately, the Debtors turned to a financial facility during a slowdown of business, and were unable to comply with their debt covenants.  Declaration at *9-10.  The Debtors have filed for bankruptcy with the belief that that an expedited sale of their business is essential to not only preserving the underlying value of their operations by providing customers and employees with a clear path forward, but in satisfying the Company’s obligations to its creditors.  Declaration at *13.  Thus, it appears that this case, like many in the current bankruptcy environment, will likely involve a 363 sale of assets followed by the proposal and confirmation of a liquidating chapter 11 plan.

One way in which creditors can assert their interests is to attend the Formation Meeting and become a part of the creditors’ committee.  The creditors’ committee is one of the most active participants in a corporate bankruptcy, and has access to a significant amount of information not available to normal creditors.  There are, naturally, trade-offs to gaining access to this information (including limitations on a company’s ability to trade in securities of the debtor), but you will be far better informed of what occurs in the bankruptcy proceeding.

Another way creditors can assert their interests is to attend the Section 341 Meeting of Creditors to depose the debtor’s representative regarding the assets and liabilities of the bankruptcy estate.  Creditors may retain counsel to conduct such an examination of the debtor’s representative.  The Section 341 meeting of creditors is an integral component of a bankruptcy proceeding.

General topics that are discussed during a Section 341 meeting may include the following:

  • The nature and scope of a debtor’s assets and liabilities;
  • The amount of accounts receivable and accounts payable;
  • The extent that the debtor is able to repay its creditors;
  • Whether insurance remains active;
  • The condition and location of goods received in the 20-45 days before bankruptcy;
  • The debtor’s or trustee’s plan to reorganize its debt or liquidate its assets;
  • The debtor’s plan after it emerges from bankruptcy (not applicable to a Chapter 7 debtor);
  • Whether the debtor experienced any changes in revenue since filing for bankruptcy; and
  • Potential avoidance actions to be commenced by the debtor or trustee