Summary: Avante Health Solutions has filed for Chapter 11 bankruptcy to facilitate the sale of its assets to Staple Street Capital (SSC). The sale will allow Avante to deleverage its balance sheet and continue operations, with SSC providing financial support for the company’s future growth.
Key Takeaways:
- Avante is selling its assets to SSC through a court-supervised auction, with SSC serving as the “stalking horse bidder.”
- The company plans to pay creditors in full and exit the Chapter 11 process with SSC as a financial partner for long-term growth.
Avante Health Solutions has filed for voluntary protection under Chapter 11 of the U.S. bankruptcy code to facilitate the sale of the company’s assets. Avante entered into an asset purchase agreement (APA) with an affiliate of Staple Street Capital (SSC), where SSC will acquire substantially all of the company’s assets. This agreement aims to support Avante’s recapitalization, enabling the company to deleverage its balance sheet and continue operations long-term.
Chapter 11 Filing for Asset Sale
Declaring Chapter 11 bankruptcy will allow for a quick and orderly sale of Avante’s assets under Section 363 of the Bankruptcy Code, with SSC serving as the “stalking horse bidder” in a court-supervised auction and sale process.
“Our team has been working diligently to strengthen our financial foundation in the face of difficult circumstances brought on by ongoing litigation, which has cost Avante approximately $20 million over the past several years,” said Jim Leitl, chief executive officer and president of Avante Health Solutions. “After evaluating our options, the Board and management team determined that entering into an agreement with Staple Street Capital, who will support Avante’s long-term success, is the best path forward. We are confident that this acquisition best positions the business for the future.”
Court Approval and DIP Financing
The agreement with SSC remains subject to court approval and other customary conditions, with an expected completion date by year-end. Avante intends to continue operating as usual during the process. In connection with the proposed sale transaction, Avante has received debtor-in-possession (DIP) financing from SSC to support the business through the sale process.
Avante intends to pay vendors, suppliers, and other trade creditors in full under normal terms for goods and services provided during the bankruptcy case. The company plans to exit Chapter 11 with a healthy balance sheet and SSC as a financial partner to support its future growth.
“We are excited to partner with Avante to provide the strategic and capital resources to enable a successful recapitalization of the business and support its long-term growth strategy,” stated the partners of SSC. “We look forward to further investing in Avante to meet the highest standards of customer care and quality, and to further innovate new value-added services and solutions for customers.”