CareMax Files For Chapter 11 Bankruptcy Protection

(RTTNews) - CareMax Inc. (CMAX; CMAXW) said that it has initiated prearranged voluntary chapter 11 proceedings in the U.S. Bankruptcy Court for the Northern District of Texas. The company agreed to sell its management services organization and also announced a sale process for the Company's core centers' assets.

CareMax has entered into an agreement with an affiliate of Revere Medical, pursuant to which Revere Medical will acquire the Medicare Shared Savings Program portion of the Company's management services organization (the "MSO Business") that supports care provided to approximately 80,000 Medicare beneficiaries. The sale of the MSO Business is anticipated to be consummated simultaneously with the consummation of CareMax's Prearranged Plan. The Company intends to wind down the ACO REACH and Medicare Advantage portions of its management services organization.

CareMax also announced that it has reached an agreement in principle on a "stalking horse" agreement with a third-party buyer for the Company's operating clinic business. The company intends to disclose the proposed terms of the stalking horse agreement and the potential purchaser in the coming days, when and if an agreement is finalized.

The stalking horse bid will be subject to an auction and, if an agreement with the stalking horse bidder is not finalized in the coming days, CareMax's current secured lenders - who have been providing capital to the business for the past four months - will credit bid for the Core Centers Assets.

Simultaneously, CareMax entered into a restructuring support agreement with lenders holding 100 percent of the Company's secured debt obligations. The RSA provides for, among other things, the lenders' support for the Sale Transactions and the Prearranged Plan and the lenders' agreement to provide CareMax with a $30.5 million debtor in possession financing facility to support CareMax's operations through confirmation of the Prearranged Plan.

CareMax anticipates that the sale transactions and prearranged plan will be consummated in early 2025.

CareMax noted that it will continue to operate and maintain its commitment to providing high-quality patient care and services. The DIP Financing is expected to provide sufficient liquidity to support the Company's ongoing operations throughout the restructuring process.