UpHealth Holdings files bankruptcy in wake of $31.35 million judgment

By Sarah Lizee

Olympia, Wash., Sept. 19 – UpHealth, Inc. subsidiary UpHealth Holdings, Inc. filed Chapter 11 bankruptcy on Tuesday in the U.S. Bankruptcy Court for the District of Delaware.

The filing follows the Sept. 14 decision by a trial court in New York to grant a $31.35 million summary judgment in favor of Needham & Co. LLC in a lawsuit unrelated to the company’s operations, UpHealth said in a press release.

“Following the summary judgement, we immediately initiated a comprehensive review of our options, and determined that voluntarily filing for Chapter 11 is necessary to mitigate the financial impact of the trial court’s decision,” Sam Meckey, chief executive officer of UpHealth, said in the release.

“We do not expect this announcement to have any impact on our operations or on the work we are doing to deliver technology-enabled services to our customers.

“We remain confident in the future prospects of our business, and are taking this proactive step so that we may best protect the interests of our stakeholders and achieve a fair resolution of this matter through an appeals process of the Needham judgment.”

UpHealth filed a number of customary first-day motions that, once approved, will allow the company to continue to operate in the normal course of business without interruption to its customers, vendors and employees.

The company expects to receive court approval for these requests and intends to pay vendors in full for all goods received and services provided after the filing date.

In its petition, the debtor reported up to 49 creditors, $100 million to $500 million in assets and $100 million to $500 million in liabilities.

DLA Piper is serving as legal counsel to UpHealth.

The Delray Beach, Fla.-based digital health company filed bankruptcy under Chapter 11 case number 23-11476.

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