CareMax: Sale-Based Chapter 11 Plan Exits in 78 Days
CareMax Nov 2024 N.D. Texas ch. 11 used DIP financing and sale transactions; plan confirmed Jan 2025, effective Feb 2025.
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.
CareMax reached an effective date on February 3, 2025 after completing the asset dispositions described in its filing announcement.
| Debtor(s) | CareMax, Inc. and debtor affiliates |
| Court | U.S. Bankruptcy Court, Northern District of Texas (Dallas Division) |
| Case Number | 24-80093 |
| Petition Date | November 17, 2024 |
| Judge | Hon. Michelle V. Larson |
| Confirmation Date | January 31, 2025 |
| DIP Facility | $122.0 million total ($30.5 million new money, $91.5 million roll-up of prepetition first lien obligations) |
Business Profile and Distress Drivers
Business overview. The First Day Declaration 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 larger annual patient volume across business lines.
Steward connection. 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 an equity stake in CareMax in connection with the transaction, and Steward's contract rejection posture was cited as a catalyst for CareMax's path to filing. Senator Edward Markey publicly cautioned about the ongoing role of former Steward leadership in the post-sale business relationship.
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) needed to qualify for annual CMS shared savings payments.
Steward Medicare acquisition. 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 performance. CareMax's filings described COVID-era headwinds, constrained capital markets, inflationary cost pressure, and reimbursement lag. CareMax's Q1 2024 release reported an adjusted EBITDA loss and a deteriorating medical expense ratio versus the prior year. Q2 2024 results included a large net loss and a $133.0 million non-cash impairment charge.
| 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 |
The First Day Declaration also described approximately $11.0 million of unrestricted cash as of the petition date and an inability to maintain certain covenant compliance and/or make a quarterly interest payment under a prepetition term loan.
Balance sheet. A report described $693M in debt and $390M in assets at filing.
| Reported item (at filing) | Amount | Source note |
|---|---|---|
| Total debt | $693M | Reported filing snapshot |
| Total assets | $390M | Reported filing snapshot |
Chapter 11 Sale Architecture
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. The Amended Plan and Confirmation Order indicate the plan also included other sale transactions (pharmacy, optical, and scripts-related).
DIP Financing and Milestones
DIP financing. Public summaries highlighted a $30.5 million DIP facility. The DIP Motion described a $122.0 million DIP facility that combined up to $30.5 million of new money with a $91.5 million roll-up of prepetition first lien term loan obligations.
The DIP Motion described milestone expectations including near-immediate bidding procedures filing and a target emergence in roughly 85 days, along with 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).
| 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. The DIP Motion and Final DIP 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.
| 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. The clinic sale process was governed by the Bidding Procedures Order for the "Core Centers Assets." Court 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.
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.
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. The First Day Declaration 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 and stated that without the ACO TSA services, the debtors would effectively forfeit any 2024 shared savings payment.
ACO shared savings dependencies. The First Day Declaration described CMS shared savings payments as calculated annually, paid once per year, and contingent on quality reporting and data submission. The declaration stated that the required data (including MIPS clinical quality data) is complex to compile and tied to a data and analytics platform provided under the ACO TSA. Filings stated there was no feasible alternative pathway to recreate the data processing capability in time to meet reporting deadlines.
| Filing-described item | What it controlled |
|---|---|
| Annual CMS shared savings payment | ACO profitability |
| MIPS/quality data submission | Eligibility for shared savings |
| ACO TSA services and platform access | Data processing and submission capability |
| Physician compensation sensitivity | Provider alignment and retention |
Sale consideration. The Amended Disclosure Statement described first lien recoveries as tied to "sale transaction equity consideration" plus residual distributable cash. The MSSP portion of the MSO business was described as being sold to Revere Medical for $10 million plus program-year payments. The MSO and ACO business was sold to Revere Medical, and a confirmation update described the same buyer-facing transaction. The Amended 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 recoveries. The confirmed plan distributed sale proceeds through a chapter 11 plan. The Amended Disclosure Statement 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.
| 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. 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.
Release and injunction framework. 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).
Confirmation and effective date. 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. The plan administrator's Final Decree Motion sought to close 53 debtor cases and keep one remaining case open — Sapphire Holdings, L.L.C. — for administrative purposes. Remaining matters including claims review and potential causes of action would be handled in the remaining case.
Post-effective plan supplement dispute. 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 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 |
|---|---|
| Mar. 5, 2025 | Deadline for final assumption/rejection schedules |
| Mar. 10, 2025 | "Final" plan supplement schedule filed; employment agreements at issue listed as rejected |
| Mar. 24, 2025 | Demand letters described as sent by ClareMedica |
| Apr. 25, 2025 | Florida action described as commenced by ClareMedica |
| May 8, 2025 | Seventh plan supplement described as filed; attempted to treat previously-rejected agreements as assumed/assigned |
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 chapter 11 case coverage, visit the ElevenFlo bankruptcy blog.
