robb, I am not a lawyer but in my very limited experience with Defense Department contracts the anti-assignment clause is generally not triggered by a BK, M&A event or change in equity ownership. The clause simply means Rotech can't, as an example, sell its government contracts to Apria or Lincare who will service them through an alternative system. However, Lincare could buy out all of Rotech and simply get what is called a Novation from the Feds, confirming that the contract will continue under new ownership.
This was a hot-button issue when the Viet Nam War wound down and a lot of contractors like Grumman, MacDonell-Douglas, General Dynamics and Northrop went through all kinds of M&A gyrations to cope with curtailed defense spending during the wind down. Shows you how old I am to remember all that ancient history, way back when.
I actually think that the bigger issue may be a Congressional inquiry into whether the CMS contract award was improperly awarded to a contractor without the financial wherewithal to execute it or may have provided unsuitable financials during the bidding process. I have been wondering for weeks if THIS was the actual reason for the FED's raiding Rotech headquarters; maybe it had nothing at all to do with Medicare overcharges.
Hey, feel free to correct me on the contract stuff if you have better information. I am certainly no expert in this area.
Regards.
AI
