No industry is immune from financial difficulties. Although the news often reports on businesses such as retail stores and restaurants filing for bankruptcy, the truth of the matter is that even fields like the healthcare industry can run into money woes, forcing medical businesses and even hospitals to take legal action to protect themselves.
One medical provider, Adeptus Health, recently took those steps by filing for Chapter 11 bankruptcy. Adeptus, based out of Lewisville, Texas, provides emergency medical services at a number of free-standing emergency rooms. The interim CEO of the company says that demand for their services has grown, but their attempt to expand has led to expenditures that have left the company strained. Deerfield Management, a hedge fund group out of New York, has invested in the company and sought to help it restructure. It is reported that Deerfield has even provided Adeptus with $45 million in financing. It is expected that when all is said and done Deerfield will own the company.
When businesses, including those in the medical field, run into financial trouble, they have a number of debt relief options available to them. Bankruptcy is probably not the first that comes to mind, but even bankruptcy has different avenues that can be taken. Chapter 13 is always an option, but, as can be seen here, Chapter 11 bankruptcy may be an option, too.
So what is the difference? There are a number of differences between these two. For example, Chapter 13 has more strict eligibility requirements than Chapter 11. Also, a trustee is always appointed in Chapter 13 cases, whereas they are not necessarily appointed in a Chapter 11 case.
Those who want to learn more about business bankruptcy and the differences between these two bankruptcy routes should consider discussing the matter with an attorney who has a significant amount of experience in the field.
Source: Becker's Hospital Review, "Adeptus Health files for bankruptcy," Ayla Ellison, April 20, 2017