Adeptus reorganization plan confirmed, emergence seen in ‘coming days’

By Caroline Salls

Pittsburgh, Sept. 27 – Adeptus Health Inc.’s plan of reorganization was confirmed Wednesday by the U.S. Bankruptcy Court for the Northern District of Texas.

According to a company news release, Adeptus expects to complete its financial restructuring process and emerge from Chapter 11 in the coming days, after the conditions to the plan are satisfied.

As previously reported, reorganized Adeptus will be owned by affiliates of investor Deerfield Management Co.

Adeptus said its restructuring under the plan is expected to improve the financial flexibility and operational structure of the business, while better positioning reorganized Adeptus for long-term success.

“Adeptus will emerge from this process with the financial flexibility and operational support necessary to continue our mission of proving the highest quality medical care to the communities we serve,” chairman and interim chief executive officer Gregory W. Scott said in the release.

Under the plan, holders of debtor-in-possession financing claims will receive new equity interests in designated debtors.

Deerfield will also receive new equity interests in exchange for its secured claim.

Holders of medical malpractice claims will be provided relief from the stay imposed by Bankruptcy Code to prosecute their claims solely to seek recovery from the applicable insurance policies.

To the extent that insurance is unavailable or insufficient to cover the claims, these creditors will receive a share of proceeds of a litigation trust, to be paid the same as general unsecured claims.

Third-level general unsecured claim distributions will be allocated to holders of Deerfield deficiency claims and defined unsecured claims until the Deerfield deficiency claims are paid in full.

If the defined unsecured claims are paid in full, the remaining third-level distributions will be distributed to the Deerfield parties on account of their deficiency claims until those claims are paid in full.

Holders of defined unsecured claims will also receive a share of a fourth-level distribution.

Existing preferred interests will be canceled. However, to the extent holders of medical malpractice and general unsecured claims are paid in full, these interest holders will receive a share of litigation trust proceeds.

Existing common interests will be canceled. However, to the extent holders of medical malpractice and general unsecured claims and preferred interests are paid in full, these interest holders will receive a share of litigation trust proceeds.

Upon effectiveness of the plan, Adeptus Health will no longer be a publicly held company, and it will be dissolved as a corporate entity.

Based in Lewisville, Texas, Adeptus maintains a network of freestanding emergency rooms and partnerships with health care providers. The company filed for bankruptcy on April 19 under Chapter 11 case number 17-31432.

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