Modivcare Reveals Chapter 11 Bankruptcy Filing

Modivcare Inc. (Nasdaq: MODV) revealed that it has filed for Chapter 11 bankruptcy.

As a company, Denver-based Modivcare offers technology-enabled health care services and provides non-emergency medical transportation (NEMT). The company’s Modivcare Home division includes its personal care, remote patient monitoring and nutritional meal delivery services.

“Chapter 11 is what you file when you have a hope of rehabilitation, when you have a company that is still operating and just needs a breathing spell to get its affairs in order, to prevent collection efforts by creditors and to just have a chance to restructure its financial obligations,” Adam Stein-Sapir, a bankruptcy expert at Pioneer Funding Group LLC, explained to Home Health Care News.

Modivcare described the filing as a “comprehensive restructuring transaction” and noted that the company has support of many of its key stakeholders.

“Modivcare sits at the center of the preventive health care ecosystem,” Heath Sampson, CEO and president of Modivcare, said in a press statement. “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.”

The company has entered a Restructuring Support Agreement (RSA) with over 90% of first lien lenders and more than 70% of second lien lenders. The lenders agreed to provide $100 million in “debtor-in-possession.”

Overall, Modivcare aims to reduce $1.1 billion in debt from its balance sheet.

In the past, leaders at Modivcare have been open about its challenges including contract losses and changes to New York’s Consumer Directed Personal Assistance Program.

The company hasn’t announced any plans to shut down any of its service lines.

“Modivcare remains committed to providing excellent service to clients and their members,” the company said in its statement.

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