Jordan Health Products I, Inc. and its affiliated debtors have filed a motion to convert their bankruptcy cases from Chapter 11 to Chapter 7, signaling the final phase of their corporate wind-down after successfully selling their business assets. The motion, filed May 23, 2025, in the U.S. Bankruptcy Court for the District of Delaware, comes after the company exhausted available funding and determined it cannot confirm a Chapter 11 reorganization plan.
Operating as Avante Health Solutions, the company filed for Chapter 11 protection on October 8, 2024, and has since completed the sale of substantially all of its assets through two separate transactions. The medical equipment company is now seeking an "orderly process administered by a chapter 7 trustee" to maximize recoveries for creditors.
"The Debtors have liquidated substantially all of their assets, have no operating business to save, and lack the funding to move forward with any plan in these Chapter 11 Cases," the company stated in its filing. "Accordingly, the Debtors have no alternative but to convert the Chapter 11 Cases to chapter 7."
The company completed two significant asset sales during its bankruptcy: the MedSurge Division based in Louisville, Kentucky, was sold to DRE Resume, LLC in a transaction that closed on November 13, 2024, and the remainder of the company's assets were sold to AHS Acquisition Holdings, LLC, with that sale closing on January 21, 2025.
Following the sales, the company entered into a transition services agreement (TSA) with the buyer to facilitate an orderly transition of operations. That agreement has now expired, leaving the debtors without funding to continue in Chapter 11.
A key component of the company's bankruptcy strategy was a settlement approved by the court on November 22, 2024, which preserved certain estate assets, including claims and causes of action, for the benefit of general unsecured creditors. These assets would now be pursued by a Chapter 7 trustee if the conversion is approved.
"It is the Debtors' judgment that in the particular circumstances of these Chapter 11 Cases, the goal of maximizing net recoveries for creditors will best be achieved through an orderly process administered by a chapter 7 trustee," the company stated in its filing.
The motion outlines specific conversion procedures, including a May 28, 2025 deadline for professionals to file final fee applications, requirements for turning over books and records to the Chapter 7 trustee within 14 days of appointment, and deadlines for filing schedules of unpaid post-petition debts and final reports.
The company noted that under Bankruptcy Code section 1112(a), it has "the absolute right to convert" its voluntary Chapter 11 case to Chapter 7 since none of the statutory limitations apply: the debtors remain in possession, the case was voluntarily commenced, and there have been no prior conversions.
The court has scheduled a hearing on the motion for June 25, 2025, with an objection deadline of June 18, 2025.
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