Miami-based healthcare company Cano Health Inc. has secured the support of lower-ranking creditors for a plan to reduce its debt by approximately $1 billion and emerge from bankruptcy under new ownership. During a court hearing on Friday, the company and the official committee of unsecured creditors announced the agreement, which involves senior lenders, who are owed around $974 million, taking control of the company in exchange for forgiving most of the debt.
US Bankruptcy Judge Karen Owens has agreed to allow Cano’s debt reduction plan to be voted on by creditors before making a decision on whether to approve the proposal at a court hearing scheduled for next month. Owens indicated that she would likely sign an order to initiate the vote once the final changes to the deal’s wording are finalized.
Under the reorganization plan, first-lien lenders would receive approximately 48% of what is owed to them, while lower-ranking creditors, including bondholders owed $306 million, would be repaid about 1%. Other unsecured creditors could recover up to 19% of what they are owed. Cano Health offers healthcare services to low-income patients who depend on government insurance programs. The company was founded in 2009 by two physicians and went public in 2021 through a merger with a blank-check company.
Cano Health filed for bankruptcy in February, attributing its financial challenges to regulatory obstacles and unsuccessful expansion efforts. The case is under the jurisdiction of US Bankruptcy Court in the District of Delaware (Wilmington).
