NEW YORK (AP) — Overwhelmed with $576 million in debt, hospital operator LifeCare has filed for Chapter 11 bankruptcy protection, and plans to sell itself.
The Plano, Texas, chain runs 27 long-term hospitals Texas, Pennsylvania and eight other states. It said it will continue to do business and pay its employees through the bankruptcy process.
The company, which was acquired by private equity firm Carlyle Group LP in 2005, says it has agreed to be bought by a group of its senior secured lenders, but hopes to see what results from an auction supervised by the bankruptcy court.
According to a bankruptcy court filing, LifeCare had $575.9 million in debt and $422.2 million in assets. Its biggest creditor is US Bank, which owns $128.1 million in senior notes.
LifeCare said Tuesday it has secured $25 million in financing from JPMorgan Chase, although that financing must be approved by the bankruptcy court. The company has around $20 million in cash on hand.