Lender questions nSpire Health’s viability

LONGMONT — nSpire Health Inc., a developer of respiratory medical devices and software for respiratory information systems that filed for Chapter 11 bankruptcy protection in April, is unlikely to return to viability, according to nSpire’s primary creditor.

The company has been effectively inoperational for several months, court documents filed by creditor Montage Capital allege.

In a flurry of back-and-forth filings in U.S. Bankruptcy Court in Denver over the past several weeks, competing narratives about nSpire’s woes have emerged: nSpire accuses its creditor of unfairly stymying efforts to continue operations, while Montage alleges lack of investment and mismanagement have sealed the firm’s fate.

nSpire Health is based at 1830 Lefthand Circle in Longmont. The company was formed in late 2006 in Louisville and moved to Longmont in 2007.

Currently, according to court documents, the company’s primary shareholder and investor is John Head. nSpire’s longtime CEO Michael Sims resigned abruptly in early March, and the company’s remaining workforce was terminated later that month.

nSpire’s phones are not being answered, and the voice mailbox is full. The company is represented by Steven Abelman, an attorney with Brownstein Hyatt Farber Schreck LLP in Denver. Abelman did not immediately return a call for comment.

nSpire entered into a loan and security agreement with Montage in June 2018, under which nSpire received an initial advance of $1.65 million, according to court documents filed by nSpire’s attorneys.

In the months that followed, nSpire failed to meet revenue projections established as part of the loan agreement, Montage claims.

In February 2019, “Sims told [Montage] that [nSpire’s] financial performance was well behind their financial projections and that [nSpire] needed to raise capital or ‘seek an exit,’” court documents show. Sims then told Montage that if nSpire’s primary shareholder “Head would not provide additional capital to fund operations, Mr. Sims would ‘walk.’”

Adequate funding was not provided, and Sims indeed walked, according to court filings.

After Sims’ resignation, Montage demanded repayment of the loan balance of $1,713,297.26 and did not “engage [nSpire] in substantive discussion” before that demand, nSpire’s legal filings claim. “Instead, Montage precipitously and unilaterally froze the debtors’ operating account and has refused to release funds for basic expenses, including salaries and travel for the Debtor’s board chairman to meet with Montage.”

nSpire claims that because of Montage’s “callous indifference, employees have lost their jobs, have not been paid their last paycheck, they have lost medical insurance and have been denied other benefits.”

Upon taking control of nSpire’s account, Montage began repaying itself to the tune of $305,000 on April 1 and $250,000 on April 5, nSpire alleges in court filings. Montage then transferred another $500,000 on April 19.

Montage scheduled a foreclosure sale of nSpire’s assets for April 23, prompting nSpire to file for bankruptcy protection on April 22.

Regarding the April 19 transfer of $500,000, nSpire claims in court filings that ”Montage gave no prior notice of this action or that it was even considering this action.” That action was Montage’s “final blow” that “disabled [nSpire] and destroyed value, not to mention trust.”

Montage legal filings dispute nSpire’s characterization of events as “a blend of outright fabrications and half-truths in an attempt to paint [Montage] as the cause of its financial demise.”

According to Montage filings, “As [nSpire] is fully aware and, despite [nSpire’s] — actually, Mr. Head’s — inflammatory and accusatory language throughout [nSpire’s legal filings], debtor’s insolvency has nothing to do with [Montage] … Debtor’s failure to pay its employees is the sole responsibility of [nSpire] and its investor.

Furthermore, the company is unlikely to be profitable in the future even after a Chapter 11 restructuring, according to Montage.

“Even if the customer base is intact and willing to continue to do business with [nSpire], which is unknown and less likely with each passing day, [nSpire] has conceded that it is only able to go back into operations if there is a substantial investment of new capital,” according to a Montage filing. nSpire “has not been successful in locating any source of funding post-bankruptcy and has not articulated any viable plans for doing so.”

Montage’s filing continues: “Without employees, active leadership, or any disclosed plans for additional funding, [nSpire’s] bankruptcy serves only to delay the inevitable and to negatively affect the value of the collateral as each day goes by.”

LONGMONT — nSpire Health Inc., a developer of respiratory medical devices and software for respiratory information systems that filed for Chapter 11 bankruptcy protection in April, is unlikely to return to viability, according to nSpire’s primary creditor.

The company has been effectively inoperational for several months, court documents filed by creditor Montage Capital allege.

In a flurry of back-and-forth filings in U.S. Bankruptcy Court in Denver over the past several weeks, competing narratives about nSpire’s woes have emerged: nSpire accuses its creditor of unfairly stymying efforts to continue operations, while Montage alleges lack of investment and mismanagement have sealed the firm’s fate.

nSpire Health is based at 1830 Lefthand Circle in Longmont. The company was formed in late 2006 in Louisville and moved to Longmont in 2007.

Currently, according to court documents, the company’s primary shareholder and investor is John Head. nSpire’s longtime CEO Michael Sims resigned abruptly in early March, and the company’s remaining workforce was terminated later that month.

nSpire’s phones are not being answered, and the voice mailbox is full. The company is represented by Steven Abelman, an attorney with Brownstein Hyatt Farber Schreck LLP in Denver. Abelman did not immediately return a call for comment.

nSpire entered into a loan and security agreement with Montage in June 2018, under which nSpire received an initial advance of $1.65 million, according to court documents filed by nSpire’s attorneys.

In the months that followed, nSpire failed to meet revenue projections established as part of the loan agreement, Montage claims.

In February 2019, “Sims told [Montage] that…