--Express Scripts announced plans to divest interest in Liberty Medical in August
--Management purchased the company from Express in December
--Announced layoffs were postponed Thursday, according to reports
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By Stephanie Gleason
Liberty Medical Supply Inc., the diabetes-supply provider known for its often-parodied commercials, filed for Chapter 11 bankruptcy protection on Friday.
The Port St. Lucie, Fla., company listed assets and debts of between $100 million and $500 million each, according to documents filed with the U.S. Bankruptcy Court in Wilmington, Del. It didn't cite a reason for seeking Chapter 11 protection in the filing.
Liberty Medical's parent company, Polymedica Corp., which also filed for Chapter 11 Friday, was acquired in 2007 by Medco Health Solutions Inc. for $1.5 billion. Last April, Express Scripts Holding Co. (ESRX) purchased MedCo for $29.1 billion but announced plans in August to divest itself from that business.
Express Scripts sold the business to Liberty's Management in December, according to the pharmaceutical company.
Shortly after taking back the company, management filed federal layoff notices for more than 200 workers, according to several local media reports. The company, however, announced Thursday, with the layoffs expected to go into effect Friday, that the employees would be kept at work for at least two more weeks, according to local news station WPTV.
In addition to diabetes supplies, the company sells sleep apnea, ostomy and urology medical supplies, and it provides home delivery of medications.
Liberty Medical's commercials featured Wilford Brimley, who has had a long acting career but is probably most famous recently for his appearances as Liberty Medical's spokesman that have been spoofed by both "Saturday Night Live" and "Family Guy."
In some commercials, Mr. Brimley encourages customers to find out if their supplies are covered by Medicare, the federally funded insurance program for the elderly.
As a result of cuts to government spending, reimbursement rates for Medicare and other federally funded insurance programs are expected to be reduced. The company didn't cite this specifically in its filing.
Liberty Medical owes $137 million to its largest unsecured creditors, Medicare claims processor CGS Administrators, according to court papers. Former owner Medco is also listed as an unsecured creditor owed $14.2 million. The company said both claims are disputed.
Neither Liberty Medical nor its bankruptcy attorney responded to requests for comment Friday.
--Jon Kamp in Boston contributed to this article.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com)
Write to Stephanie Gleason at [email protected]
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