The Brentwood, Tennessee-based hospital operator will reduce its debt by around $500 million.
Quorum Health announced Monday afternoon that the company received court approval for its prepackaged recapitalization plan and will emerge from bankruptcy in early July.
On April 7, Quorum filed for Chapter 11 bankruptcy, entering into a restructuring support agreement (RSA) on a "pre-packaged plan" to reduce its debt.
Once the court issues its final order, the Brentwood, Tennessee–based hospital operator expects to reduce its debt by around $500 million.
"We are pleased to reach this important milestone, which allows our company to begin a new chapter with the flexibility and resources to continue supporting our community hospitals as they serve on the frontlines of this pandemic and beyond," Marty Smith, COO of Quorum, said in a statement. "We are grateful for the confidence of our financial stakeholders and partners, as well as our dedicated employees and physicians, and look forward to building on the significant progress we have made in strengthening our operations in recent years."
In its bankruptcy announcement in early April Quorum said its hospitals would remain open along with its subsidiary Quorum Health Resources. Additionally, the company said its employees would be paid full wages and benefits while supply vendors are also paid for goods and services.
The bankruptcy filing was the culmination of months-long discussions with Quorum debt holders, including KKR & Co., a New York-based private equity firm.
In December, KKR presented Quorum with a non-binding proposal letter that related to a "potential recapitalization transaction," including the "buy-out of the public shares held by minority holders at a price of $1.00 per share."
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.