Alvarez & Marsal

While serving as Chief Executive Officer of Integrated Health Services (“IHS”) during
its successful reorganization, Alvarez & Marsal recognized that one of the company’s
wholly-owned subsidiaries, ROTECH Healthcare, Inc., a leading provider of home
respiratory therapy services and medical equipment, was underperforming operationally and
that its value to creditors would be enhanced if it became a stand-alone entity. The
company had strong cash flows but its potential was stifled when IHS filed for bankruptcy
in 2000. Alvarez & Marsal worked with ROTECH’s management to boost the company’s
performance by reducing operating costs, improving revenue and engineering a spin-off
that resulted in its emergence as a healthy new public company, free to focus on future
growth. Specific actions included consolidating billing centers and purchasing, emphasizing
higher margin product lines and reducing headcount. As a result, annual EBITDA improved
from $116 million to $181 million and margins improved from 20% to 28%. In addition,
following its spin-off from IHS, Alvarez & Marsal served as ROTECH’s interim Chief
Executive Officer.