Sad news...Florida-Based Medical Information Technology Company Files Bankrupt, Patrick Danner, 08/01/2001
KRTBN Knight-Ridder Tribune Business News: The Miami Herald - Florida
Copyright (C) 2001 KRTBN Knight Ridder Tribune Business News; Source: World Reporter (TM)
Parkstone Medical Information Systems generated a lot of buzz over a hand-held device it created to help doctors write prescriptions and reduce medication errors, but it apparently didn't produce enough cash to keep it on sound financial footing.
Weston-based Parkstone filed for bankruptcy protection Tuesday in U.S. Bankruptcy Court in Fort Lauderdale. In a Chapter 11 filing, a company seeks to reorganize its debt under the court's supervision.
Parkstone reported debts of about $18 million, including about $7.4 million in secured debt held by a group of venture capital firms that includes Oak Investment Partners, Partech International, Cardinal Partners, Salix
Ventures and Aether Capital.
The venture capital firms sunk much more into Parkstone, however. The Herald reported in April of last year Parkstone raised $36.5 million in two rounds of venture funding, but the figure may have since grown.
Efforts to reach top officers at Parkstone were unsuccessful. The company was founded in 1998 by Glenn Parker, an internist, and Lewis Stone, a computer programmer who previously worked at Motorola. Stone designed the digital device, similar to a PalmPilot, for use by physicians prescribing medications.
In the most recent press release posted on the company's website, dated March 1, Parkstone reported its hand-held devices had been deployed to 3,600 physicians.
"Demand for the Parkstone system is increasing rapidly as physicians realize the potential of e-scribing to save lives and simplify the practice of medicine," said John H. Johnson, the company's president and chief executive, according to the press release. Nevertheless, that demand hasn't translated into financial success. "Cash from operations wasn't sufficient to cover debt service and those trade payables," said Michael Goldberg, Parkstone's bankruptcy lawyer. "We just need to reorganize."
A hearing is set for today in bankruptcy court to get the court's approval on a loan of up to $650,000 that the venture capital firms have agreed to make to the company, said Goldberg, a partner with Ackerman Senterfitt in Fort Lauderdale.
The loan is necessary to continue Parkstone's operations. The parties are in the process of negotiating longer-term financing, he added.
Paul Singerman of Berger Singerman, the law firm representing the venture capital firms, referred questions to the group's Connecticut lawyer, who couldn't be reached for comment. |
