BRANFORD >> A major regional provider of orthotic and prosthetic devices has filed for Chapter 11 bankruptcy, the company’s president and chief executive officer confirmed Monday.
New England Orthotic and Prosthetic Systems, which has its corporate offices at 15 Commercial St., sought protection in mid-July from its creditors under Chapter 11. Under federal bankruptcy laws, Chapter 11 allows a company to keep operating while its owners seek to restructure their debt.
The company has 21 locations in Connecticut and three other states. Twelve of the locations are in Connecticut, including one in New Haven.
David Mahler, president and chief executive officer of New England Orthotic and Prosthetic Systems, said the company’s senior debt has been acquired by the owner of a Long Island, New York-based orthotic and prosthetic retailer that he did not identify. Mahler said the individual who purchased the senior debt os expecting to merge his company with New England Orthotic and Prosthetic Systems by the end of the year.
Senior debt is prioritized debt that gets paid before unsecured creditors receive their money.
Mahler said New England Orthotic and Prosthetic Systems was forced to file for bankruptcy protection because the private equity firm that recapitalized the business in May 2012, Buffalo, New York-based Summer Street Capital Partners, “over-extended us.”
“That, along with some regulatory changes governing the industry, led us to make the Chapter 11 filing,” Mahler said.
According to the Chapter 11 filing, New England Orthotic and Prosthetic Systems has fewer than 50 creditors. The…
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