Carbon Health Technologies, a technology-enabled healthcare provider, has reached an agreement with its existing lenders on the terms of a comprehensive restructuring that establishes a clear path to recapitalization and new ownership.
The agreement provides for a dual-track, court-supervised process that allows the company to pursue, in parallel, confirmation of a Chapter 11 plan premised on a debt-for-equity exchange, and a post-petition marketing and sale process for all or a portion of the company’s assets. This structure is intended to maximize value while preserving flexibility as the process moves forward.
To implement the restructuring, Carbon Health and certain affiliates have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas.
“The decisive actions we are taking today will strengthen our financial foundation and better position Carbon Health to advance our mission of making high-quality healthcare accessible to everyone,” Kerem Ozkay, CEO of Carbon Health, said. “We appreciate the strong support from our lenders, which will enable us to move through this process efficiently and with minimal disruption to our patients, partners and employees.”
Looking back, Carbon Health expanded its platform to meet growing community needs and to leverage its broader, omnichannel care delivery model. As demand patterns shifted in the post-pandemic environment and capital markets for healthcare companies tightened, the company faced increased pressure on its balance sheet. In response, Carbon Health implemented a range of debt-reduction and cost initiatives.
“Over the past year, we’ve made meaningful progress by focusing our footprint, simplifying operations and strengthening financial discipline. By using the Chapter 11 process to implement a transaction that will right-size our capital structure, we expect to emerge as a more resilient organization with the flexibility needed to support sustainable growth and continue delivering best-in-class care,” Ozkay said.
In support of the proceedings, Future Solutions Investments has committed to provide up to $19.5 million in debtor-in-possession (DIP) financing. This financing is expected to provide sufficient liquidity to support the company’s operations throughout the restructuring and sale process, including the payments to employees, providers and suppliers, as well as the continued delivery of patient care, while the company transitions to new ownership.
“It will be business as usual while we complete the restructuring and sale,” Ozkay said. “Patients should experience no disruption to their care. We will continue providing urgent and primary care to new and existing patients in our clinics and through virtual visits when appropriate. Patients will also retain full access to their medical records, and their health information will remain secure.”
The company has filed a series of customary motions with the court that will allow it to maintain its business as usual and operate in the ordinary course, including to meet its commitments to employees and make timely payments to vendors, and expects to have the financial liquidity to execute these proceedings and continue business in the ordinary course.
“Our customers who use our healthcare software can expect the same level of reliability, service and support throughout this process,” Ozkay said.
Alvarez and Marsal serves as financial advisor to the company and Pachulski Stang Ziehl & Jones serves as bankruptcy counsel.
