A Texas bankruptcy court has approved the sale of Wellpath Holdings, Inc.'s recovery solutions business in a significant transaction valued at approximately $395 million plus additional considerations. Judge Alfredo R. Pérez of the United States Bankruptcy Court for the Southern District of Texas, Houston Division, signed the order on January 21, 2025, in Case No. 24-90533.
The purchase price structure includes the full release of DIP Facility obligations totaling $395 million, plus reimbursements received for critical vendor payments, and an additional amount if the final cash amount exceeds $10 million. The buyer will also assume certain liabilities as part of the transaction.
The order approves the sale to RS Purchaser LLC, which includes the transfer of 100% equity interests in several key subsidiaries: Wellpath Recovery Solutions, LLC, Correct Care of South Carolina, LLC, Harborview Center, LLC, and Behavioral Health Management Systems, LLC.
The transaction was executed through a stalking horse purchase agreement, with RS Purchaser LLC serving as the stalking horse bidder. After an extensive marketing process, no other qualified bids were received by the deadline, establishing RS Purchaser's bid as the highest and best offer for the assets.
The court determined that the sale process was conducted in good faith and in compliance with previously approved bidding procedures. The order provides for the transfer of assets free and clear of liens, claims, and encumbrances, with certain exceptions for permitted liens and assumed liabilities.
As part of the transaction, the court also approved the dismissal of the Chapter 11 cases for the acquired recovery solutions debtors upon closing of the sale. The order includes comprehensive provisions protecting various stakeholders' interests, including governmental units, insurance companies, and labor unions.
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Document length: 156 pages