By Rick Romell of the Journal Sentinel
The assets of Criticare Systems Inc., a Wisconsin medical equipment company that filed for receivership in October, are to be purchased by a unit of India-based Opto Circuits Ltd., its former corporate parent company.
Opto outbid another would-be purchaser in an auction Friday, offering $3.2 million for Criticare, which manufactures patient-monitoring equipment used in anesthesia and other medical settings.
Opto also agreed to hire substantially all of Criticare's employees — one of several conditions that made the Indian firm's offer more attractive, court-appointed receiver F. John Stark III said in a document filed in Waukesha County Circuit Court.
Criticare has 38 employees, another court document shows.
Complicating Opto's willingness to hire them, however, is the issue of where Criticare will locate going forward.
The staffers have been working out of offices in Waukesha and in the Dane County community of Deerfield that are held by another company, Cardiac Science Corp.
Cardiac Science, based in Waukesha, makes automated external defibrillators — heart-reviving devices that are installed in many public places.
Cardiac Science and Criticare were sister companies, both owned by Opto.
Then, in late September, Cardiac Science's chief lender staged a corporate coup. Declaring Cardiac Science in default on more than $80 million in debt, the lender ousted the Waukesha firm's board of directors, ushered executives from their offices and, in late October, filed for Chapter 11 bankruptcy reorganization for Cardiac Science.
Meanwhile, the lender, an entity called CFS 915 LLC, which appears to be part of a Los Angeles private equity firm called Aurora Capital Group, also took Criticare into receivership, a state court proceeding similar to bankruptcy.
Both Criticare and Cardiac Science have continued to operate, shielded from creditors by the court actions. The Cardiac Science assets are to be auctioned off on Jan. 6.
For now, however, Criticare "doesn't really have a right to operate in either" the Waukesha or Deerfield locations, Stark said.
He said Cardiac Science is making offers to some of the Criticare employees.
The two companies previously had shared some staff, he said.
Opto is to close on the Criticare purchase next Tuesday. Besides the $3.2 million the sale would raise, Criticare might have another $1 million or so in receivables yet to be collected, Stark said. Claims against the firm total about $11 million to $12 million, he estimated.
In bankruptcy documents, Cardiac Science lists $31.3 million in assets against $103.7 million in debts.
Of the liabilities, $87.2 million is claimed by CFS 915.
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