SynCardia bankruptcy sale heads for final OK

Tucson-based artificial heart maker SynCardia Systems will seek final approval of a bankruptcy sale of its assets to a proposed buyer on Friday, after no competing bids emerged.

Approval of the asset sale would pave the way for SynCardia’s emergence from Chapter 11 bankruptcy reorganization.

SynCardia filed for Chapter 11 bankruptcy reorganization on July 1 in Delaware, proposing to sell all of its assets to its senior secured creditor in an effort to save the company.

Sindex SSI Lending LLC, an affiliate of Philadelphia-based Versa Capital, purchased about $22 million worth of SynCardia’s senior debt at a steep discount in June.

Sindex bid $19 million of that debt in a so-called credit bid for SynCardia, plus $150,000 in cash, to buy the company.

The deal was subject to higher and better offers that would have been considered in a bankruptcy auction scheduled for Wednesday, but no competing bids were filed, SynCardia said in court documents filed Tuesday.

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U.S. Bankruptcy Judge Mary F. Walrath will now consider final approval of the sale to Sindex on Friday.

SynCardia, maker of the world’s only artificial heart approved as a bridge to transplant in the U.S., Europe and Canada, has continued to operate with debtor financing provided by Sindex.

SynCardia’s shareholders, including local investors, and its unsecured creditors will get nothing from the bankruptcy plan.

Versa specializes in buying and recapitalizing troubled companies. Its portfolio of turnaround projects includes retailers The Wet Seal, Avenue Stores and Black Angus Steakhouses, and manufacturers Bell and Howell and Polartec.

SynCardia’s temporary Total Artificial Heart evolved from the original Jarvik-7 artificial heart, a first when it was implanted and kept Dr. Barney Clark alive for 112 days in 1982. After failed attempts to bring the heart to market, it was picked up for further development in the 1990s by what was then University Medical Center.

SynCardia was founded in 2001 by University of Arizona heart surgeon Dr. Marvin Slepian, biomedical engineer Richard Smith and former UA heart surgeon Dr. Jack Copeland.