DVI Health Will Restructure Its Leases in Default : Medical: Irvine equipment supplier will make new arrangements with IPS Health Care, which owes it $5.6 million for leased imaging systems.

DVI Health Services Corp., a financial services firm and medical equipment supplier, said that it is restructuring its defaulted leases with IPS Health Care Inc., in an effort to help IPS get back on its feet.

DVI reported Tuesday that IPS, also located in Irvine, had defaulted on about $5.6 million in lease payments for mobile Magnetic Resonance Imaging systems that DVI owns. IPS uses the leased machines to provide MRI services to physicians, who use the devices to scan the body for injuries.

DVI chief executive David Higgins said that his company is renegotiating the leases to allow IPS to operate, rather than declare insolvency.

“We fully expect they will be restructured fully and will perform under the (new) lease,” Higgins said.

Higgins said that although DVI does not expect to collect on about $3.9 million of the $5.9 million owed to it, it does not expect to charge the losses to reserves. The computerized machines, about the size of pickup trucks, are valued at the total amount owed to DVI.

IPS chief executive Andrew Galligan said Tuesday that negotiations for a new lease agreement are underway. He announced last week that the company’s financial woes are mostly because of troubles it has had collecting reimbursement fees from insurance companies.

IPS said in the earlier announcement that its debts exceed its income but that it would nevertheless remain in business.

Higgins said that IPS “had more equipment than they needed” to operate efficiently. Under the ongoing negotiations, he said, IPS returned one of five machines leased from DVI.

A sixth MRI unit, leased through another financial services company, remains with the company.