Adeptus Health Inc. announced that it has collaborated with Deerfield Management Company and certain of its other creditors on the terms of a comprehensive financial restructuring plan that is expected to significantly reduce the outstanding debt under the Company's existing credit facility and better position Adeptus for long-term success.
As expected, to implement the restructuring, Adeptus filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division (the "Chapter 11 Cases"), to pursue a plan of reorganization ("Chapter 11 Plan"). While Adeptus Health's wholly-owned subsidiaries are included in the court-supervised restructuring process, the joint venture entities to which Adeptus is a party are not part of the court-supervised process. Through this restructuring, it is expected that ownership of the Company will transition to Deerfield. Deerfield is a 23-year-old firm focused on advancing healthcare care through investment, information and philanthropy with over $8 billion in assets, and has been a long-term investor in Adeptus.
Importantly, all of the Company's owned and joint-venture freestanding emergency rooms are continuing to operate as normal. These facilities are open and are continuing to serve patients with the same high-quality care and medical attention for which they are known.
Adeptus has also received a commitment from Deerfield for $45 million in debtor-in-possession (DIP) financing, which is expected to support the Company's operations during the court-supervised restructuring process. Upon completion of the restructuring, it is also expected that Deerfield will provide the Company with additional funding, operational support and healthcare expertise, ensuring that Adeptus continues to offer patients the highest-quality care, and support employees, affiliated physicians and partners.
"Our partnership with Deerfield and the actions we are taking today are intended to strengthen Adeptus and enable us to continue our mission of providing access to the highest-quality medical care to the communities we serve," said Gregory W. Scott, Chairman and Interim Chief Executive Officer of Adeptus. "Over the last several years, Adeptus has invested significantly to expand our facility footprint and respond to the growing demand for high-quality emergency medical care. While these investments have increased patient access, the associated expenditures have strained the Company's financial resources. We believe that our partnership with Deerfield and the associated court-supervised restructuring process is the best path forward for Adeptus. As a long-term investor in the Company, Deerfield understands our business well. Their desire to deepen their relationship and commitment to our business, employees and partners demonstrates that they share our confidence in Adeptus and in our future prospects."
Jim Flynn, Managing Partner of Deerfield Management, said, "We are pleased to enter into this partnership with Adeptus. Adeptus Health's network of freestanding emergency rooms, employees and partners provides an excellent foundation for efficiently delivered, high-quality emergency medical care. We look forward to working closely with the Adeptus team and the dedicated physicians and medical staff working in its facilities to ensure that the Company reaches its full potential. Deerfield is committed to support the Company with capital, healthcare expertise and operational support."
Scott continued, "As always, our facilities are open 24-7, and we are continuing to offer rapid access to board-certified physicians on-site. Importantly, we expect to continue working with our vendors and supporting the medical staff in our facilities as normal throughout this process. We thank our incredible team members for their hard work and dedication to our patients."
Adeptus has filed a number of customary motions seeking court authorization to continue to support its business operations during the court-supervised process, including uninterrupted payment of employee wages and benefits. The Company intends to pay vendors for goods and services provided after the filing date, April 19, 2017. The Company expects to receive court approval for these requests.
Additional information can be accessed by visiting Adeptus Health's website at www.adhc.com/restructuring or calling Adeptus Health's Restructuring Hotline, toll-free in the U.S., at (844) 469-3932. Court filings and other documents related to the court-supervised proceedings are available at a website administered by the Company's claims agent, Epiq Systems, at http://dm.epiq11.com/ADPT.
Norton Rose Fulbright US LLP is serving as reorganization counsel to Adeptus, and FTI Consulting is serving as financial advisor.