Weeks after Coram Healthcare Corp. brought back former Chief Executive Officer Don Amaral as interim CEO, a money-losing subsidiary filed for bankruptcy protection and will discontinue its operations in 60 to 90 days.
A Coram spokesman said the two events were largely unrelated but added that Amaral approved the subsidiary's decision.
Denver-based Coram said the move will not affect its operations, which include home infusion therapy and prescription services.
The subsidiary, Coram Resource Network, contracts with managed- care payers to manage members' home health benefits. In its Chapter 11 filing in federal bankruptcy court in Wilmington, Del., Resource Network claimed about $50 million in debts and about $10 million in assets, the spokesman said.
Coram also announced a net loss of $15.2 million, or 30 cents per share, on revenues of $143.2 million in the third quarter ended Sept. 30. Losses were largely because of Resource Network's declining revenues. In the year-ago quarter Coram lost $2.8 million, or 6 cents per share, on revenues of $143.6 million.
The bankruptcy filing may reduce some of Coram's $289.3 million debt. Coram is also trying to sell its fast-growing prescription services business to help pay down that debt and is negotiating with creditors about provisions on its debt agreements.
Amaral, 46, replaced Richard Smith, 40, to whom Amaral ceded the top position in April.
In other bankruptcy news, Vencor reported a loss of $42.7 million, or 61 cents per share, for the third quarter, compared with net income of $37.3 million, or 54 cents per share, in the year-ago period. Revenues fell 5% to $681.9 million.
The Louisville, Ky.-based nursing home and long-term-care hospital company, which filed for Chapter 11 bankruptcy protection in September, said it continues to negotiate with creditors on a reorganization plan.
As part of that plan Vencor must reach a final settlement with the federal government over allegations of Medicare fraud.