Laser Spine Institute has told state regulators it was forced to close its operations after the company’s lenders unexpectedly took actions that left it without any operating capital.
The abrupt shutdown on Friday resulted in 354 workers losing their jobs immediately, with another 66 employees scheduled to be terminated by the end of the month, Laser Spine said in a Worker Adjustment and Retraining Notification, or WARN notice, that was filed with the Florida Department of Economic Opportunity.
The notice was filed March 4, the same day a former Laser Spine employee filed a class action complaint in federal court in Tampa saying Laser Spine had failed to provide 60 days’ notice of the layoffs as required under the WARN act. The complaint seeks 60 days in pay, accrued vacation pay and retirement benefits for the laid off workers.
In its March 4 notice, Laser Spine said it couldn’t provide the required notice.
“While the company would have preferred to provide WARN notice before now, earlier notice was not feasible because the closure of the facility was not anticipated, and issuing notice at an earlier date would have undermined the financing efforts that were underway at that time,” the notice said.
Laser Spine, which provided minimally invasive neck and back procedures, at one point had seven surgery centers across the country. Last year, Laser Spine hired a new CEO, Jack Brace, to help restructure the company, and it said in a March 1 news release about the closure that it had achieved an operational turnaround, but wasn’t able to get financing to undertake a Chapter 11 bankruptcy process and continue operations.
The March 4 WARN provided more details.
“The company has been diligently working for the past several months to secure financing for the company to allow it to continue go-forward operations. Unfortunately, on March 1, 2019, these financing efforts fell through suddenly and unexpectedly and, equally unexpectedly, the company’s lenders exercised certain of their setoff rights, which depleted the company’s operating capital,” the WARN said.
Laser Spine separately said it would reach out to other surgical providers and patients in the markets where it operated — Tampa, Cincinnati, Scottsdale, St. Louis — to find other options.