BY Richard Summerfield
CareMax Inc, which runs a system of medical centres catered toward elderly patients, has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Northern District of Texas.
Miami-based CareMax filed Chapter 11 on Sunday, listing assets of between $100m and $500m, and liabilities between $500m and $1bn. CareMax sought court protection after cost cuts and attempts to refinance its debt.
As per the filing, CareMax has filed customary motions with the court, seeking authorisation to maintain business-as-usual operations, including by continuing operations to ensure patients at its clinics continue to receive high quality, value-based healthcare, paying associated wages, including for its doctors and nurses, without interruption and paying the existing pre-petition claims of certain vendors that are critical to the health and safety of CareMax’s patients and critical to the operation of the company’s medical centres.
The company has also announced it has entered into an agreement to sell its management services organisation. According to a statement announcing the deal, CareMax has entered into an agreement with an affiliate of Revere Medical which will see the company acquire the Medicare Shared Savings Program portion of the CareMax’s management services organisation that supports care provided to approximately 80,000 Medicare beneficiaries. The sale of the business is anticipated to be consummated simultaneously with the consummation of CareMax’s prearranged Chapter 11 plan.
CareMax also announced that it has reached an agreement in principle on a ‘stalking horse’ agreement with a third-party buyer for its operating clinic business. The closing of this sale is also anticipated to be consummated simultaneously with the consummation of CareMax’s bankruptcy plan. CareMax intends to disclose the proposed terms of the stalking horse agreement and the potential purchaser when and if an agreement is finalised.
“After a careful review of the Company’s strategic alternatives, we have determined that the transactions announced today are our best opportunity to protect the long-term value of the CareMax assets and ensure our patients, providers, and health plans can continue to rely on the comprehensive, coordinated care we provide,” said Carlos de Solo, chief executive of CareMax. “We are deeply appreciative of the outstanding team members across CareMax, whose hard work and commitment to our partners is resolute.”
CareMax’s Chapter 11 filing is the latest in a series of Chapter 11 filings by other healthcare groups this year, including Massachusetts-based Steward Health Care. Steward filed for bankruptcy in May, seeking to sell its 31 hospitals and address $9bn of debt.
News: Medical services provider CareMax files for Chapter 11 restructuring