A small investment group will be competing against pharmacy chain Rite Aid in an auction for the assets and intellectual property of failed telemedicine company HealthSpot. With two competing bids received before Wednesday’s deadline and a third pending, the U.S. Bankruptcy Court in Columbus, Ohio, will hold an auction Monday, according to Columbus Business First.
The investment group previously put money into Dublin, Ohio-based HealthSpot and lost about $650,000 before HealthSpot shut down at the end of last year, then filed to liquidate weeks later. But the leader of the $1 million “stalking horse” bid, Ohio assisted-living facility owner Paul Gross, still believes in HealthSpot’s retail telemedicine kiosks.
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“I feel like it’s a fantastic product and still has a really viable place in the market,” Gross told Columbus Business First. “This is a kind of business that could have potentially changed Central Ohio had they managed it a little better – and still has the potential to, depending on who buys it.”
He said HealthSpot management burned through so much of the $47 million it had raised by spending lavishly on things such as executive salaries and expensive office furniture, according to the local business journal. Gross also criticized marketing efforts.
Gross’ group will have to outbid Rite Aid, which reportedly submitted a bid and deposit of $1.15 million. The Camp Hill, Pennsylvania-based pharmacy chain — which is being acquired by Walgreens — had HealthSpot telemedicine kiosks in 25 stores in the Cleveland, Akron/Canton and Dayton/Springfield markets.
There was to be a third bidder as well. A third party filed a bid of $1.25 million about 5 minutes after the deadline and didn’t include the required deposit. “We were going to ask the court for instructions on how to proceed but the deposit was never received,” HealthSpot bankruptcy trustee Myron Terlecky told MedCity News via email.
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HealthSpot previously said that its assets were worth $5.2 million. About $3.5 million of that value is in 191 telemedicine kiosks, 137 of which have never been used.
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