Carbon Health has filed for Chapter 11 bankruptcy as part of a pre-arranged financial restructuring aimed at recapitalizing the company or facilitating a sale.
Seven things to know:
1. The San Francisco-based hybrid primary care company said Feb. 2 that it reached an agreement with its existing lenders on a restructuring plan that establishes a path to new ownership.
2. The restructuring includes a dual-track, court-supervised process that allows Carbon Health to pursue confirmation of a Chapter 11 plan based on a debt-for-equity exchange while simultaneously marketing all or a portion of its assets for sale. The company said the approach is designed to maximize value and preserve flexibility.
3. Carbon Health also secured a commitment for up to $19.5 million in debtor-in-possession financing from Future Solutions Investments. The financing is expected to support ongoing operations throughout the restructuring and potential sale process, including payments to employees, providers and vendors.
4. CEO Kerem Ozkay said the filing will strengthen the company’s financial foundation and allow it to continue delivering care without disruption. “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,” Mr. Ozkay said in a news release.
5. Carbon Health said patients will continue to receive care throughout the restructuring process, with no interruption to urgent care, primary care or virtual services. Patients will also retain full access to their medical records, and customer support for the company’’s healthcare software platform will continue as normal.
6. The company attributed its financial challenges to shifting demand patterns following the COVID-19 pandemic and tighter capital markets for healthcare companies. Carbon Health said it has implemented cost- and debt-reduction initiatives over the past year, including narrowing its footprint and simplifying operations.
7. Founded in 2015, Carbon Health operates in-person clinics and virtual care services across the U.S.
