Healthcare company ModivCare filed for bankruptcy late last night (20 August) after entering into a restructuring support agreement (RSA) that contemplates giving first lien lenders 98% of the reorganized equity.

The RSA is backed by about 90% of the outstanding principal under the first lien facility, and 70% of the outstanding principal under the second lien notes. The restructuring would reduce about USD 1.4bn in funded debt to about USD 300m.

To fund the bankruptcy case, the supporting lenders will provide USD 100m in DIP financing.

Judge Alfredo Perez of the US Bankruptcy Court for the Southern District of Texas is overseeing the Chapter 11 case and has scheduled a first day hearing for 2:30pm CT today (21 August).