Springfield, April 30—Family Pharmacy Inc.’s Chapter 11 bankruptcy proceedings concluded with Smith Management Services LLC, an affiliate of J.M. Smith Corp., providing the winning acquisition bid for just shy of $16 million.
The Ozark-based independent pharmacy with 20 locations filed an initial petition for bankruptcy on April 30, citing two years of net losses amounting to $7.5 million.
During a sale hearing Aug. 7 in a federal bankruptcy courthouse in Kansas City, Smith Corp.’s court-approved bid was nearly $14 million in cash and $2 million in credit to obtain Family Pharmacy’s assets, said Jim MacLaughlin, the chief restructuring officer hired in the pharmacy’s bankruptcy reorganization case.
South Carolina-based Smith Corp. subsidiary Smith Drug Co. was Family Pharmacy’s primary wholesale pharmaceutical distributor and its largest creditor, according to bankruptcy court documents. MacLaughlin said Smith Management Services beat out bids from The Bank of Missouri, Walgreens, Hy-Vee Inc., Benzer Pharmacy and a group of operators of southwest Missouri pharmacies comprising Koby Prater, Ryan Summers and Mike Stuart, who submitted a joint bid.
“Business will continue as usual,” MacLaughlin said after the sale, adding he expected the Family Pharmacy brand and all stores to remain. “The company’s team of employees have largely remained intact, and the scale and scope of the operations continues as it did before the bankruptcy.”
Family Pharmacy employed 172 at its 20 retail pharmacies and two long-term care pharmacies at the time of the sale, he said.
The company posted net losses of $3.5 million in 2017 and $4 million in 2016, following profits of $686,000 in 2015. In 2017, gross revenue dropped to $60.3 million from $66.8 million in 2016 and $68.3 million in 2015.
Family Pharmacy officials cited a drop in the number of prescriptions filled to 1 million in 2017 from 1.4 million three years earlier.
“This drop in prescriptions was mostly reflected in the reduced retail prescription revenue,” the court records read. “Nationally, the numbers of prescriptions being filled are down year over year.”
Family Pharmacy was operated by founders Lynn and Janet Morris. The couple indicated they had retired from the business in May, following the bankruptcy filing.
A month prior to filing for bankruptcy, Family Pharmacy was identified as a tenant in the $6 million Wildwood Plaza development in Republic. It has since backed out.
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