Court confirms Physiotherapy prepack after 41-day Chapter 11
The court approved Physiotherapy Holdings’ disclosure statement and confirmed its joint prepackaged Chapter 11 plan on December 23, after all confirmation objections were withdrawn, settled, or overruled source filing. The debtors had filed in Delaware on November 12, 2013, with Physiotherapy Holdings listing estimated assets of $500.0 million to $1.0 billion, estimated liabilities of $100.0 million to $500.0 million, and 50-99 creditors source filing.
The case was a balance-sheet restructuring for one of the largest pure-play outpatient physical therapy platforms in the U.S., with 581 outpatient rehab clinics, 29 orthotics and prosthetics clinics, operations in 29 states and D.C., more than 1,500 clinicians, and roughly 2.9 million annual patient visits source filing. Management said the filing followed a March 2013 discovery of overstated revenue and profitability, which forced the company to deleverage around a revised financial profile source filing.
The prepack cut funded debt by about 62%, from roughly $375 million to $144 million: about $140 million of bridge debt rolled into an exit facility, roughly $210 million of senior notes converted into 100% of reorganized equity, existing equity was wiped out, trade claims were left unimpaired and paid in full, and a $4.5 million litigation trust was funded to pursue claims tied to the accounting issues and 2012 transaction source filing.
