Houston, TX - Wellpath Holdings, Inc. and its affiliated debtors have filed an amended Chapter 11 plan of reorganization in the United States Bankruptcy Court for the Southern District of Texas (Case No. 24-90533). The healthcare services provider, represented by McDermott Will & Emery LLP, submitted the plan on February 10, 2025.
The amended plan outlines a comprehensive restructuring strategy that includes the conversion of debt to equity, a new takeback facility, and the establishment of a liquidating trust. Under the proposed plan, first lien lenders would receive 3% of the new common equity and $124.2 million of the takeback facility.
The plan also features a significant equity financing component, with new common equity representing 97% of the reorganized company being offered through an equity financing arrangement. This offering is subject to dilution from management incentive plan interests and certain premium payments.
A key component of the restructuring includes the creation of a Contingent Value Right (CVR) agreement between the reorganized company and a liquidating trust, which will have a seven-year term from the effective date. The CVR would be triggered by certain transaction events, including a sale or exchange of majority ownership, asset sales, or an initial public offering.
The plan provides for various classes of claims, with administrative claims and priority tax claims receiving treatment in accordance with the Bankruptcy Code. General unsecured creditors will receive their pro rata share of beneficial interests in the liquidating trust.
McDermott Will & Emery's team includes Felicia Gerber Perlman, Bradley Thomas Giordano, Jake Jumbeck, and Marcus A. Helt, among others, representing the debtors in the proceedings.
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Document length: 85 pages