Modivcare, a technology-enabled healthcare services company, has filed for voluntary Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Texas to implement a comprehensive restructuring transaction with the support of a supermajority of its key stakeholders. Through this process, Modivcare intends to build a stronger, sustainable organization.
“Modivcare sits at the center of the preventive healthcare ecosystem,” Heath Sampson, CEO and president of Modivcare, said. “This recapitalization strengthens our balance sheet and allows Modivcare to accelerate our investment in innovation by combining technology and data with high-touch member engagement. As the connector to care, our seamlessly connected platform improves access, quality and cost for payors, providers and facilities, while positioning us to lead the future of coordinated care.”
More than 90% of first lien lenders and more than 70% of second lien lenders have entered into a restructuring support agreement (RSA) with the company. Those lenders have committed to support the company throughout this process and have agreed to provide $100 million in debtor-in-possession (DIP) financing to finance the restructuring process and to support ongoing operations during this expedited bankruptcy process. Upon the closing of the DIP loan, Modivcare will have liquidity in excess of $100 million. The restructuring will reduce the company’s total outstanding funded debt obligations by approximately $1.1 billion (which is more than 85% of its outstanding funded debt obligations) and will reduce the company’s annual cash interest and transition ownership to a group of seasoned and well-funded investors who are committed to Modivcare’s success.
All of Modivcare’s service lines will continue to operate in the ordinary course, and the company expects no interruption or change in access to care and a continued focus on operational excellence. Modivcare intends to close this transaction quickly by exiting the restructuring process early in Q4/25.
Modivcare is advised by Latham & Watkins, Hunton Andrews Kurth, Moelis and FTI Consulting. The first lien agent, the first lien lenders and the second lien noteholders executing the RSA are advised by Paul Hastings and Lazard.
