Carbon Health: Bankruptcy Update on Sale Hearing and Plan Timeline

Carbon Health Technologies, Inc. and affiliated debtors filed chapter 11 on February 2, 2026, in the U.S. Bankruptcy Court for the Southern District of Texas. Early coverage from Modern Healthcare, HealthLeaders, HCI Innovation Group, Secured Finance Network, and Fierce Healthcare described the filing as a restructuring intended to keep clinics operating while the debtors pursued a sale or balance-sheet transaction. As of Monday, March 9, 2026, the Bid Procedures Order sets a March 11 auction if needed and a March 24 sale hearing, while the docket also includes an April 2, 2026 general claims bar date.

The same docket also reflects a proposed final DIP order with an April 17 challenge deadline and a March 5 assumption and assignment notice that points to an active sale track. Carbon Health entered chapter 11 on a dual-track path, and the record now ties that path to a specific sale calendar, bar-date schedule, and proposed confirmation timeline.

The debtors are still pursuing two paths at once. The combined disclosure statement and plan filed on March 4 keeps open either a third-party sale or a lender-backed plan transaction, and the related solicitation motion sets April 24, 2026 as both the voting deadline and the plan objection deadline, with a combined confirmation hearing requested for May 1, 2026. The sale calendar, claims timetable, and plan solicitation schedule are now moving on parallel tracks.

Debtor(s)	Carbon Health Technologies, Inc. and 29 jointly administered debtors
Court	U.S. Bankruptcy Court, Southern District of Texas (Houston Division)
Case Number	26-90306
Petition Date	February 2, 2026
Judge	Hon. Christopher M. Lopez
General Claims Bar Date	April 2, 2026
Auction Date	March 11, 2026, if needed
Sale Hearing	March 24, 2026
Confirmation Hearing	Requested for May 1, 2026
DIP Facility	Up to $19.5 million from Future Solution Investments LLC, with $9.0 million interim availability

Carbon Health Bankruptcy Update and What Happens Next

The February 10 bid procedures order remains the clearest filing-backed status marker in the case. It set March 6, 2026 at 5:00 p.m. Central Time as the bid deadline, March 11, 2026 at 12:00 p.m. Central Time as the auction date if the debtors receive enough qualified bids, March 16, 2026 at 4:00 p.m. Central Time as the sale objection deadline, and March 24, 2026 at 1:00 p.m. Central Time as the sale hearing. The order also lets the debtors adjust the sale timeline in accordance with the bid procedures without returning for a new order on every date change.

That sale path is still live. The debtors filed a notice of proposed assumption and assignment on March 5 and then amended it on March 6, signaling that contracts and leases were still being lined up for a potential transaction after the combined plan papers were filed.

The plan track is moving at the same time. The combined disclosure statement and plan says the debtors will pursue whichever outcome produces the most value, either a third-party sale transaction or a plan without the third-party sale toggle. The solicitation motion proposes March 17 as the voting record date, March 27 as the solicitation deadline, April 24 as the voting and objection deadline, April 29 for the confirmation brief and tabulation affidavit, and May 1 for the combined confirmation hearing. The motion also says the hearing may be adjourned from time to time.

The docket now contains the sale calendar, the claims bar date, and the plan solicitation schedule at the same time.

Claims Agent and Bar Date

The debtors' Kroll retention order appointed Kroll Restructuring Administration LLC as claims and noticing agent on the petition date. The later bar date order set April 2, 2026 as the general deadline for most prepetition claims and August 1, 2026 for governmental units, and the March 3 claims notice circulated those dates to creditors and parties in interest.

The bar date order also preserves separate later deadlines for rejection-damages claims and claims affected by later schedule amendments. Claims administration now sits on the same near-term calendar as the March sale milestones, the April 17 DIP challenge deadline, and the proposed April 24 solicitation deadline.

Sale Process and Plan Terms

Carbon Health entered chapter 11 with a lender-backed dual-track structure, and the debtors' first-day filings say the goal was to preserve enough liquidity to run either a sale process or a plan transaction. That framework has not changed. What has changed is that the plan economics are now more concrete than they were in early February.

The combined disclosure statement and plan classifies general unsecured claims in Class 6, marks that class as impaired and entitled to vote, and gives it an estimated recovery of 10%. That is the first filing-backed unsecured recovery estimate currently on the docket. The plan also identifies the voting classes as Classes 1(b), 1(c), 1(d), 4, and 6.

The sale and plan tracks are also linked through the DIP milestones. The debtors' DIP motion sought interim authority to borrow up to $9.0 million and final authority up to $19.5 million from Future Solution Investments LLC as administrative and collateral agent for the DIP lenders. The motion says the facility carries an 11.5% annual interest rate, a 3.0% default-rate step-up, and a maturity tied to the earliest of a failed final-order timeline, plan effectiveness, a sale of substantially all assets or equity, six months from signing, or an earlier default.

The proposed final DIP order adds more pressure to that calendar. The proposed final DIP order sets April 17, 2026 as the challenge deadline for committee or other estate challenges to the prepetition liens and claims, subject to a tolling mechanic if the committee seeks standing. It also gives the committee only a $75,000 investigation budget for those challenge issues. The financing milestones, sale schedule, and proposed confirmation calendar all run through April and early May 2026.

Filing Background and Capital Structure

The First Day Declaration describes a business that grew quickly during and after the pandemic, then ran into a capital structure and cost base that no longer fit the operating environment. Carbon Health said it operated about 93 clinics across eight states and supported that network with roughly 1,400 employees and about 480 healthcare providers at the petition date.

The same First Day Declaration lays out the debt stack. It says the debtors owed not less than $77 million in secured term debt, plus clinic-level secured debt of about $3.9 million to John Muir Health, about $3.8 million to Stanford Health Care, and about $7.6 million to Prime Healthcare Services. The debtors also estimated about $36 million in unsecured obligations, including around $7 million in unsecured promissory notes.

Management linked the filing to lower post-pandemic demand, tighter capital markets, and a cost structure built for a larger enterprise. The First Day Declaration says the most immediate trigger was a prepetition levy in favor of former landlord RPT Realty, L.P., after Silicon Valley Bank froze about $1.9 million on January 5, 2026 and the debtors lost liquidity they said they could not replace in time.

The landlord fight did not disappear once the case started. In a February 23 settlement motion, the debtors proposed paying RPT $75,000, releasing the roughly $1.97 million frozen at SVB, limiting RPT to a $375,000 allowed general unsecured claim, and dismissing the dispute with prejudice. The proposed settlement ties directly to the January cash freeze the debtors identified as a filing trigger.

Business Model and Expansion History

Carbon Health describes itself as a modern urgent-care and primary-care platform built around in-person clinics, virtual access, and a proprietary software stack. Its about-us page traces the business to 2015, and the bankruptcy filings describe a management-services organization structure in which the non-clinical entity supports physician-owned professional entities that actually deliver care.

Before the filing, Carbon Health had already started shrinking parts of the business. Earlier expansion had included the Steady Health acquisition and the MedPost Urgent Care deal. MobiHealthNews had earlier reported that Carbon Health laid off 250 employees in 2022, and after the petition date Hoodline reported that Carbon Health was closing three South Bay clinics while the chapter 11 process continued.

The expansion arc still matters because it shows the scale Carbon Health once tried to support. The about-us page says the company was founded in 2015, and both the Galen Growth analysis and a review of Carbon Health's boom-to-bust arc describe Carbon Health as a company that raised more than $600 million before the filing. Those analyses frame the bankruptcy as a case study in the economics of scaling clinic-based care after pandemic demand cooled.

Committee, Employee, and Patient-Care Issues

The unsecured creditors' committee was appointed on February 16, 2026, and Brown Rudnick later announced that it had been selected to represent the committee. Since then, the committee has moved beyond routine appearance filings and into direct discovery fights over the lender-controlled case structure.

In its February 27 motion to compel, the committee asked the court to force production of documents tied to the DIP motion, sale motion, and KEIP/KERP motion, and to adjourn the DIP hearing until that production was made. The motion says the committee wanted documents on ownership, lender negotiations, lien perfection, asset valuation, and the claimed need for the proposed financing. On March 3, the committee escalated that effort with a notice of intent to serve subpoenas on Future Solution Investments LLC, Hercules Capital, Inc., and Fearless Capital Management, LLC.

The debtors are also trying to hold key employees in place while that fight plays out. Their February 17 KEIP/KERP motion covers 43 employees in total and proposes a $1.2 million KEIP plus roughly $1.59 million of KERP awards through July 30, 2026 or earlier emergence or change of control. The motion says the programs are meant to keep essential employees focused on a short, transaction-driven chapter 11 process.

Because Carbon Health is a healthcare operator, patient-care oversight is part of the court record as well. On February 24, 2026, the United States Trustee appointed Suzanne Richards as patient care ombudsman in the patient care ombudsman notice. Her role includes monitoring patient care, reporting to the court at 60-day intervals, and alerting the court if care quality declines materially.

Frequently Asked Questions

Did Carbon Health file bankruptcy?

Yes. Carbon Health and affiliated debtors filed chapter 11 on February 2, 2026 in the Southern District of Texas under lead case number 26-90306.

Is Carbon Health still operating during the case?

The company said at filing that clinics would remain open, and the debtors' first-day filings say the goal of the case is to preserve operations while they pursue either a sale or a lender-backed plan transaction.

What is the Carbon Health claims bar date?

For most non-governmental prepetition claims, the March 3 claims notice sets April 2, 2026 as the deadline. Governmental units have until August 1, 2026 under the February 27 bar date order.

Who is the claims agent in the Carbon Health bankruptcy?

Kroll Restructuring Administration LLC serves as claims and noticing agent. The retention order, bar date order, and claims notice are the operative filings for the current claims calendar.

Will unsecured creditors recover anything?

The debtors' current combined disclosure statement and plan estimates a 10% recovery for Class 6 general unsecured claims. That is a proposed plan recovery, not a final distribution outcome.

What are the next deadlines after the March 6 bid deadline?

Under the bid procedures order, the next sale milestones are a March 11 auction if needed, a March 16 sale objection deadline, and a March 24 sale hearing. On the plan side, the solicitation motion proposes April 24 for voting and objections and May 1 for the combined confirmation hearing.

For more active chapter 11 case coverage, visit the ElevenFlo bankruptcy blog.