Baxano Surgical, Inc fka BAXSQ

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By Tom Corrigan Baxano Surgical Inc. (BAXSQ) won bankruptcy-court permission to begin soliciting votes from its creditors on a chapter 11 plan that divvies up the proceeds from the sale of its surgical product lines. Judge Christopher Sontchi of the U.S. Bankruptcy Court in Wilmington, Del., signed off on the company's voting materials Wednesday as well as a timetable under which the liquidation plan could gain final approval before the end of July. Judge Sontchi set a July 10 deadline for creditors to cast their ballots and scheduled a July 24 hearing to decide whether or not to confirm the plan. Even if the plan gains widespread support from creditors, it must still receive the judge's blessing before taking effect. Judge Sontchi has already approved the sale of Baxano's primary surgical instrument business to ExWorks Capital Fund I LP for $5.5 million. ExWorks said it intends to resell the Baxano assets, including the iO Flex surgical products line, to Georgia-based Amendia Inc., according to court papers. The judge also approved the sale of Baxano's three other product lines for more than $2 million, bringing total revenue from the sales to about $7.8 million. About $7 million of those proceeds have been used to pay down existing debt owed to Baxano 's senior lender, an affiliate of Hercules Technology. Under the proposed liquidation plan, recovery for unsecured creditors, owed more than $19 million, will depend entirely on the outcome of future litigation, court papers show. Baxano filed for chapter 11 protection last November. The company, based in Raleigh, N.C., designed and marketed minimally invasive surgical products used in the treatment of degenerative spine conditions. Baxano settled a federal investigation in 2013, agreeing to pay the U.S. Department of Health and Human Services $6 million. The company didn't admit to any wrongdoing. In a statement announcing the settlement, the U.S. Department of Justice alleged that Baxano had knowingly advised health-care providers to submit false reimbursement claims to Medicare and other health-care programs for spine surgeries using the company's system. Write to Tom Corrigan at [e-mail] (Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com) Subscribe to WSJ: http://online.wsj.com?mod=djnwires (END) Dow Jones Newswires June 04, 2015 12:29 ET (16:29 GMT) Copyright (c) 2015 Dow