Posted 5/21/2012 10:55 am
Updated 2 years ago
Contour Med Inc. of Little Rock filed for chapter 11 bankruptcy reorganization on May 11 and needed an emergency loan of $40,000 just to keep its doors open.
It listed debts of at least $5.98 million, but it could be as high as $10 million, according to its filing in U.S. Bankruptcy Court. Contour Med is expected to file a more detailed report with the court at a later date.
In the meantime, Contour Med, which manufactures custom-made breast prostheses, faced a dire financial situation and scrambled to borrow $40,000, according to a bankruptcy filing on May 11.
Contour's "present operating income is insufficient to fund current operations," according to its emergency motion to obtain credit.
It wanted to borrow the money from CM Medical LLC of Little Rock, which is Contour's largest unsecured creditor at $3.8 million.
Contour "will not be able to stay in business without the loan" from CM Medical, the filing said.
U.S. Bankruptcy Judge James Mixon approved Contour's request to borrow the money on May 14.
Contour Med also filed a pro forma budget with the court that projected it would have sales of $93,600 between May and August. Its lost during that period was projected at $19,741.
Contour Med listed its estimated assets between $100,000 and $500,000. Contour also reported it had between 50 and 99 creditors.
The $5.98 million in debt is owed to creditors holding unsecured claims. Other unsecured creditors include the Johnston Rock Co. LLC of Heber Springs, which has a claim of $173,448 and the University of Arkansas for Medical Sciences which has a claim for $114,948.
Barry Corkern, Contour's interim CEO, declined to comment on the bankruptcy Monday.
"We will be filing a business plan with the court pretty soon," Corkern said.
Corkern has been a member of Contour Med's board since 2000 and is the president of Barry M Corkern & Co., an investment advisory company founded in 1982.
Contour Med was one of the first companies to graduate in 1997 from UAMS BioVentures, which was formed by UAMS as the state's first biomedical business incubator, helping researchers commercialize their lab work.
Contour Med said on its website that it "creates the most life-like look and feel custom breast prostheses available in the world."