CareMax: Sale-Based Chapter 11 Plan Exits in 78 Days

CareMax, Inc. entered chapter 11 in November 2024 with a restructuring designed to be executed primarily through asset dispositions rather than a traditional standalone reorganization. The company announced MSO and Core Centers sales alongside the bankruptcy filing, using a DIP facility and a court-approved sale and solicitation timeline to push toward a fast exit.

The case illustrates how a provider/business-services hybrid—value-based care ACO operations plus an owned clinic footprint—can be separated into different sale transactions under a plan, how a “headline DIP” can sit alongside a larger roll-up and milestone-driven cadence, and how post-confirmation administration can persist even after a comparatively quick effective date.

CareMax reached an effective date on February 3, 2025 and emerged after completing the asset dispositions described in its filing announcement and a subsequent confirmation update. The case also illustrates how value-based care platforms can become time-sensitive: the MSO/ACO business depended on annual CMS shared savings and quality reporting, while the Core Centers sale consideration mix (cash plus equity) meant creditor recoveries could hinge on post-closing valuation rather than pure cash proceeds given the reported cash-plus-equity mix.

Debtor(s)	CareMax, Inc. and debtor affiliates
Court	U.S. Bankruptcy Court, Northern District of Texas (Dallas Division)
Case Number (lead)	24-80093 (MVL) (as described in bankruptcy filings)
Petition Date	November 17, 2024
Confirmation Date	January 31, 2025
Effective Date	February 3, 2025
Judge	Hon. Michelle V. Larson
Business model (two-track)	MSO and ACO value-based care operations plus a Florida-focused clinic “Core Centers” footprint
Scale (from bankruptcy filings)	Three ACOs serving ~88,000 Medicare patients; 46 clinical centers in Florida; ~1,100 employees; ~260,000 annual patients and ~200,000 active members
DIP Facility	Public summaries highlighted a $30.5 million new-money DIP, while bankruptcy filings described a larger $122.0 million facility including a $91.5 million roll-up
Core Centers sale	A $100 million headline deal structured as $35 million cash and $65 million equity/units consideration, reflecting a reported cash-plus-equity mix
MSO / ACO disposition	The MSO and ACO business was sold to Revere Medical, as described in a confirmation update and a sale completion update
Plan structure	Sale-based chapter 11 plan with distributions administered by a plan administrator; disclosure materials projected a low estimated recovery for general unsecured claims (as described in bankruptcy filings)
Post-effective administration	Final decree consolidation sought to close most cases and administer remaining matters in a single remaining case (as described in bankruptcy filings)

Business Profile and Distress Drivers

What CareMax operated at filing (and why the structure mattered). Bankruptcy filings described CareMax as operating two primary business lines: a management services organization (MSO) business connected to value-based care and Medicare contracting, and a “Core Centers” clinical care centers business. The MSO business included three accountable care organizations (ACOs) serving roughly 88,000 Medicare patients, while the clinic footprint consisted of 46 centers in Florida serving a much larger annual patient volume across business lines. This split is strategically important in a distressed healthcare context: ACO/MSO operations can be asset-light (contracts, data, network relationships), while clinic operations are more asset- and lease-intensive with materially different buyer pools, diligence cycles, and operational risks.

The Steward connection and the “counterparty risk” problem. CareMax’s distress was tied to Steward Health Care’s collapse and the fallout from the 2022 Steward Medicare acquisition. Steward’s former CEO Dr. Ralph de la Torre took a meaningful equity stake in CareMax in connection with the transaction, and Steward’s contract rejection posture was cited as a catalyst for CareMax’s run-up to filing. A U.S. Senator also publicly cautioned about the ongoing role of former Steward leadership in connection with the post-sale business relationship in a press release, signaling the reputational and policy tail that can attach to healthcare reorganizations even when the formal plan mechanics are straightforward.

Bankruptcy filings provide a more operational description of why this counterparty risk was existential: the first-day declaration describes CareMax acting as an exclusive MSO across “Stewardship Health” starting in November 2022, supporting care for 170,000+ patients and approximately 2,000 providers, and tying ACO economics to data and reporting infrastructure (including MIPS data submission) that was needed to qualify for annual CMS shared savings payments. In other words, the chapter 11 was not only about balance sheet repair; it was also about keeping critical contracting and data workflows intact long enough to monetize the ACO business in a sale transaction.

A quick lookback: the Steward Medicare acquisition and growth profile. The Steward relationship originated in a 2022 transaction in which CareMax announced it acquired Steward’s Medicare value-based care business for $135 million and expanded its network to approximately 2,000 providers and more than 200,000 senior patients across 10 states in a transaction announcement. Coverage at the time highlighted the large number of patients under different CMS programs in CMS program lives.

Transaction / datapoint	Detail
Steward Medicare business acquisition (announced)	$135M consideration, including $25M cash plus an equity component
Patient lives referenced in coverage	Steward network included MA and MSSP lives at scale
Steward linkage in bankruptcy reporting	Steward’s bankruptcy and contract dynamics were cited as a catalyst and linked to contract rejection posture

Financial underperformance and liquidity pressure into the filing. CareMax’s filings described common provider distress drivers—COVID-era headwinds, constrained capital markets, inflationary cost pressure, and reimbursement lag. Public-company disclosures also reflected negative operating results. For example, CareMax’s Q1 2024 release reported an adjusted EBITDA loss and a deteriorating medical expense ratio versus the prior year in Q1 2024 results. Later coverage of Q2 2024 results cited a large net loss and a significant non-cash impairment charge in Q2 2024 results, which is often a leading indicator that asset values (and therefore borrowing capacity or covenant headroom) are under pressure.

Reported period	Metric (selected)	Value (reported)
Q1 2024	Net loss	$43.4M net loss
Q1 2024	Adjusted EBITDA	($10.5M) adjusted EBITDA
Q2 2024	Total revenue	$198.6M revenue (down ~12%)
Q2 2024	Net loss	$170.6M net loss incl. $133.0M impairment

Bankruptcy filings also provided a near-term liquidity snapshot: approximately $11.0 million of unrestricted cash as of the petition date, coupled with an inability to maintain certain covenant compliance and/or make a quarterly interest payment under a prepetition term loan. In that context, the DIP was not merely a cushion; it was described as necessary to keep operations funded and execute the sale timetable.

Balance sheet snapshot (reported) and why “assets vs debt” mattered for a sale plan. A key feature of sale-based chapter 11 plans is that recoveries are constrained by (i) the value actually realized in the sale(s), net of deal friction and administrative costs, and (ii) how much secured debt and priority claims sit ahead of unsecured stakeholders. A report described $693M debt and $390M assets at filing. Even allowing for valuation uncertainty and the limitations of “book assets” in healthcare services businesses, that snapshot helps explain why the plan’s disclosure materials projected a very low recovery for general unsecured claims and why first lien recoveries were framed as dependent on the final sale transaction results.

Reported item (at filing)	Amount	Source note
Total debt	$693M	Reported filing snapshot
Total assets	$390M	Reported filing snapshot

Chapter 11 Sale Architecture

The restructuring architecture at filing: two main sales under a plan, plus additional sale transactions. At a headline level, CareMax described its chapter 11 as a vehicle to execute agreements to sell the MSO and clinic assets, complete the process quickly, and avoid disruption to patient care, as described in its filing announcement and a bankruptcy filing overview. Bankruptcy plan definitions and confirmation findings indicate the plan’s implementation also included other sale transactions (pharmacy, optical, and scripts-related), which is typical of healthcare platforms that have layered ancillary service lines. The implementation therefore involved more than two discrete sale transactions in order to separate operating obligations and monetize remaining value across the platform’s service lines.

DIP Financing and Milestones

DIP financing: why $30.5M wasn’t the whole story. Public-facing summaries emphasized a $30.5 million DIP facility. Bankruptcy filings described a larger $122.0 million DIP facility that combined (i) up to $30.5 million of new money with (ii) a $91.5 million roll-up of prepetition first lien term loan obligations. This structure is common in lender-driven, milestone-heavy sale cases: the new money is what keeps the business operating, while the roll-up (and the lien and superpriority structure associated with it) can materially affect recoveries and committee leverage by changing the priority position of prepetition debt.

The DIP motion summary described aggressive milestone expectations (including near-immediate bidding procedures filing and a target emergence in roughly 85 days) and weekly variance testing covenants (disbursements capped at 115% of budget, receipts floor at 80% of budget, and a minimum liquidity covenant of $4.0 million). These mechanics signal a lender-negotiated “pace of case” intended to limit administrative burn and keep the estate tightly managed toward a sale closing and plan effectiveness.

DIP term (high level)	Summary from bankruptcy filings
Total DIP facility	$122.0M total, including roll-up
New money	Up to $30.5M (split between interim/final availability)
Roll-up	$91.5M of rolled-up prepetition first lien term loan obligations
Pricing (as summarized)	SOFR + 1,100 bps (PIK), plus a 10% exit premium
Milestones (as summarized)	Bidding procedures within ~1 day of petition; interim order within ~2 business days; final order within ~32 days; emergence target ~85 days
Weekly variance tests (as summarized)	Disbursements ≤115% of budget; receipts ≥80% of budget; minimum liquidity $4.0M
Carve-out caps (notable delta)	Motion summary vs final order differed on professional fee caps (bankruptcy filings)

Professional fee carve-outs: a small line item that can drive negotiation intensity. Bankruptcy filings reflected a carve-out for professional fees (a negotiated pool carved out from secured collateral to fund estate professionals even if secured creditors are otherwise paid from that collateral). In CareMax, the extracted motion summary and final order reflected different post-trigger cap amounts for debtor professionals and committee professionals (with the aggregate cap converging to $1.5 million in the final order). For professionals modeling the estate runway, these caps matter because they define the “last-dollar” funding available for estate governance during a tight milestone-driven case.

Carve-out cap category (post-trigger)	Motion summary (extracted)	Final order (extracted)
Debtor professionals cap	$1,450,000	$1,400,000
Committee professionals cap	$50,000	$100,000
Aggregate post-trigger cap	$1,500,000 (implied)	$1,500,000

Core Centers Sale Process

Core Centers sale process: stalking horse, bid protections, and timing. The clinic sale process was governed by court-approved bidding procedures for the “Core Centers Assets.” Bankruptcy filings identified ClareMedica Viking, LLC as stalking horse and set a bid deadline of January 13, 2025 with an auction on January 17, 2025 and a combined hearing date of January 28, 2025. Bid protections included a $1.25 million break-up fee and up to $2.25 million in expense reimbursement, and overbid structures were required to include sufficient cash to pay bid protections in full (a practical constraint when bidders propose credit-bid structures or mixed consideration).

A $100 million clinic sale was described as $35 million in cash and $65 million in stock or units consideration, reflecting a reported cash-plus-equity mix. From a restructuring lens, the consideration mix matters because equity and units consideration can complicate creditor recoveries, valuation disputes, and distribution mechanics under a plan, especially when the equity is not readily liquid and must be distributed through a plan administrator process.

MSO/ACO Sale and Shared Savings Dependencies

Core Centers sale milestone	Date / time (CT)	Notes
Bid deadline	January 13, 2025 (4:00 p.m.)	Bid qualification and deposit mechanics per bidding procedures
Auction	January 17, 2025 (10:00 a.m.)	Held only if multiple qualified bids
Combined hearing (sale + plan)	January 28, 2025 (9:30 a.m.)	Combined hearing structure supported fast confirmation
Bid protections	N/A	$1.25M break-up fee + up to $2.25M expense reimbursement (cap)

ACO/MSO sale transaction: preserving annual shared savings value. The MSO/ACO side of the business has a different “value driver” than a clinic footprint: participation in CMS programs and the ability to qualify for and collect shared savings payments. Bankruptcy filings emphasized that shared savings payments (paid annually) were effectively the only pathway to profit for the ACO business and that the ability to submit required MIPS quality data was critical. The filings described this submission infrastructure as tied to a transitional services agreement (ACO TSA) and a data/analytics platform. They stated that without the ACO TSA services, the debtors would effectively forfeit any 2024 shared savings payment, materially affecting ACO value and physician compensation.

This framing helps explain why the chapter 11 process focused on a fast timeline: if the estate could not preserve the operational prerequisites to qualify for shared savings payments, the “ACO buyer value” could collapse, which would reduce recoveries and likely increase litigation.

ACO shared savings “gating items” (from bankruptcy filings). The first-day declaration described a set of operational dependencies that effectively turned the ACO component of the case into a time-sensitive transaction. The core mechanics are familiar to Medicare value-based care operators: CMS shared savings payments are calculated annually, paid once per year, and are contingent on quality reporting and data submission. The declaration emphasized that the required data (including MIPS clinical quality data) is complex to compile and is tied to a data and analytics platform. Filings described these services as being provided under an ACO transitional services agreement (ACO TSA) and stated there was no feasible alternative pathway to recreate the data processing capability in time to meet reporting deadlines. The practical implication is that the estate’s value for the ACO sale transaction depended on operational continuity, not just on a signed purchase agreement.

Filing-described item	What it controlled	Why it mattered in the restructuring
Annual CMS shared savings payment	ACO profitability	Filings described shared savings as the “only pathway to profit” for the ACO business
MIPS/quality data submission	Eligibility for shared savings	Failure to submit required data could forfeit the 2024 shared savings payment
ACO TSA services and platform access	Data processing and submission capability	Filings described platform-based processing as critical and not easily replicated on short notice
Physician compensation sensitivity	Provider alignment and retention	Filings described shared savings as a substantial portion of participating physicians’ compensation

Sale consideration framing (external sources). The plan’s disclosure materials described first lien recoveries as tied to “sale transaction equity consideration” plus residual distributable cash, which is consistent with public reporting that the Core Centers sale consideration included a large equity component. Separately, the MSSP portion of the MSO business was described as being sold to Revere Medical for $10 million plus program-year payments, illustrating how sale consideration in provider cases can blend fixed purchase price with program-year payment pass-throughs. The MSO and ACO business was sold to Revere Medical, and a confirmation update described the same buyer-facing transaction. The plan’s defined terms identify the ACO purchaser as RHG Network, LLC, suggesting the purchaser structure used an RHG-branded acquisition vehicle.

Plan Structure, Recoveries, and Governance

Plan structure and recoveries: a sale-based distribution with a plan administrator. The confirmed plan was designed to distribute sale proceeds through a chapter 11 plan rather than a pure section 363 standalone sale. Bankruptcy disclosure materials reflected two key creditor constituencies:

• First lien debt claims (Class 2). The amended disclosure statement projected an allowed amount of $324.1 million, with recovery described as dependent on the Sale Transactions and not specified in the amended disclosure statement. Treatment described a pro rata share of sale transaction equity consideration plus any remaining distributable cash after DIP claims were satisfied and taking into account sale transaction cash consideration.
• General unsecured claims (Class 3). The amended disclosure statement projected an allowed amount of $157.3 million and an estimated recovery of approximately 0.22%, with recovery through a “GUC cash pool.” It also stated that general unsecured claims assumed by either purchaser would be deemed paid in full and would not share in the GUC cash pool.

These disclosures give a practitioner-friendly takeaway: the plan was structured so that (i) first lien creditors’ recovery depended heavily on the equity component of sale consideration and post-sale distributable cash; (ii) unsecured creditors were projected to receive a de minimis recovery; and (iii) any unsecured liabilities actually assumed by purchasers effectively reduced the claims pool competing for the (limited) residual cash pool.

Class	Constituency	Projected allowed amount	Estimated recovery	Treatment mechanics (high level)
Class 2	First lien debt claims	$324.1M	Not specified (dependent on Sale Transactions)	Pro rata share of sale transaction equity consideration + remaining distributable cash after DIP and sale cash mechanics
Class 3	General unsecured claims	$157.3M	~0.22%	Pro rata share of GUC cash pool; purchaser-assumed GUC claims deemed paid and excluded from pool

Plan administrator and “who controls the estate after effectiveness.” The plan contemplated a plan administrator selected by the unsecured creditors’ committee (and acceptable to the debtors and required consenting lenders) to implement distributions and wind down debtor affairs. Post-effective filings identify Advisory Trust Group, LLC as the plan administrator. This is a meaningful governance detail in sale-based plans: once the effective date occurs, the plan administrator becomes the functional “estate decision-maker” for remaining tasks—claims reconciliation, residual distributions, contract assumption/rejection implementation, and any reserved causes of action. That shift is also reflected in a final decree motion that sought to close 53 debtor cases and consolidate remaining matters into a single remaining case.

Release, exculpation, and injunction framework: opt-out mechanics. The confirmation order described solicitation materials that provided stakeholders with the full text of releases, exculpation, and injunction provisions and included opt-out mechanisms for the third-party release (including through ballot materials and opt-out forms). In practice, this points to a familiar confirmation dynamic: in sale-based plans where the estate is being wound down, releases and injunctions are often used to stabilize closing, protect purchasers, and avoid litigation that could jeopardize monetization of assets. The presence of an opt-out mechanism typically aims to support enforceability by framing third-party releases as consensual for those who do not opt out.

Confirmation, effective date, and the 78-day exit. CareMax’s plan was confirmed on January 31, 2025 and became effective on February 3, 2025, with an “exit in 78 days” timeline and a restructuring completion update. The transactions described externally—clinic assets to ClareMedica and the MSO/ACO business to Revere Medical—align with the plan’s structure as a sale-based wind-down with distributions administered post-effective.

Post-Effective Administration

Final decree consolidation: why large multi-debtor cases close “most” cases but keep one open. Post-effective administration often involves reducing the cost of maintaining many jointly administered dockets. In CareMax, the plan administrator’s final decree motion sought to close 53 debtor cases (including transferred entities and all but one post-effective debtor) and keep one remaining case open—Sapphire Holdings, L.L.C.—for administrative purposes. The motion framed the relief as a cost-reduction and case-management step: remaining matters (claims review, administration, potential causes of action analysis) would be handled in the remaining case rather than across dozens of dockets. For creditors and professionals, this affects where to file papers and how to monitor the case after emergence.

Post-effective contested matter: “final” plan supplement schedules and employment agreement disputes. Even in a quickly effective sale-based plan, contract schedules can become contested. In May 2025, a post-effective emergency motion sought to strike a “Seventh Amended Plan Supplement” that attempted to treat certain employment agreements as assumed and assigned after a prior “final schedule” had listed them as rejected. The motion argued the filing was untimely (well after a deadline established in the confirmation order) and characterized the change as driven by litigation posture. It referenced a Florida action filed by ClareMedica alleging non-compete covenants and argued the plan supplement change was intended to support that litigation by asserting the relevant employment agreement had been assumed and assigned.

Date (as described in filings)	Event	Why it mattered
Mar. 5, 2025	Deadline for final assumption/rejection schedules (per motion description)	Set the baseline for “late” plan supplement arguments
Mar. 10, 2025	“Final” plan supplement schedule filed (per motion description)	Employment agreements at issue were listed as rejected
Mar. 24, 2025	Demand letters described as sent by ClareMedica	Dispute framed around alleged breaches of non-compete clauses
Apr. 25, 2025	Florida action described as commenced by ClareMedica	Litigation posture turned on whether agreements were assumed/assigned
May 8, 2025	Seventh plan supplement described as filed	Attempted to treat previously-rejected agreements as assumed/assigned

For restructuring practitioners, this dispute illustrates a common pitfall: when sale transactions include assignment of executory contracts and employment agreements (and when non-compete covenants are at issue), the “assumed vs rejected” status can have immediate downstream consequences in non-bankruptcy litigation. A sale-based plan that relies on plan supplement schedules therefore needs tight process controls and clear deadlines, because post-effective schedule changes can create both economic and litigation externalities.

Key Timeline

Date	Event
Nov 2022	CareMax announced the $135M Steward Medicare acquisition
Nov 17, 2024	CareMax filed chapter 11 and announced sale agreements and DIP
Jan 13–28, 2025	Core Centers sale process deadlines and combined hearing window (bankruptcy filings)
Jan 31, 2025	Plan confirmed (bankruptcy filings; also referenced in advisor announcements)
Feb 3, 2025	Plan effective date and emergence (bankruptcy filings) and described as February 3, 2025
Feb 2025	Asset disposition outcomes described in a restructuring completion update
Feb–May 2025	Plan administrator seeks final decree consolidation and later litigates plan supplement schedule issues (bankruptcy filings)

Frequently Asked Questions

When did CareMax file for chapter 11 bankruptcy? CareMax filed chapter 11 on November 17, 2024.

Where was the bankruptcy case filed? The case was filed in the U.S. Bankruptcy Court for the Northern District of Texas (Dallas Division).

What businesses did CareMax operate at filing? Bankruptcy filings described two primary businesses: an MSO/ACO value-based care business serving Medicare patients and a Florida-focused clinic footprint (“Core Centers”) providing primary care and related services.

How much DIP financing did CareMax obtain, and why do some sources cite $30.5 million? Public summaries highlighted a $30.5 million DIP facility, while bankruptcy filings described a larger facility when including a substantial roll-up of prepetition first lien obligations.

Who was the stalking horse for the Core Centers assets, and what was the headline purchase consideration? ClareMedica was identified as stalking horse in bankruptcy filings, and the transaction was described as a $100 million headline deal with $35 million cash and $65 million in equity or units consideration, reflecting a reported cash-plus-equity mix.

What happened to the MSO/ACO business? The MSO/ACO business was sold to Revere Medical in connection with the chapter 11 restructuring, and a confirmation update described the same transaction.

When was the plan confirmed and when did it become effective? The plan was confirmed on January 31, 2025 and became effective on February 3, 2025.

What did disclosure materials indicate about expected recoveries? The amended disclosure statement projected allowed first lien debt claims of $324.1 million and described recovery as dependent on the sale transactions, while projecting allowed general unsecured claims of $157.3 million with an estimated recovery of approximately 0.22%.

Did anything significant happen after emergence? Yes. Post-effective filings reflected ongoing administration by a plan administrator, a final decree consolidation effort to close most debtor cases and administer remaining matters in one remaining case, and a contested matter over plan supplement schedules affecting whether certain employment agreements were treated as assumed or rejected.

Who is the claims agent for CareMax? Stretto, Inc. serves as the claims, noticing, and solicitation agent. The firm manages the claims register and distributes case notifications to creditors and parties in interest.

For more case research and restructuring breakdowns, visit the ElevenFlo bankruptcy blog.