The Courier of Montgomery County reports that filing bankruptcy to reorganize its correctional health care business, Tennessee-based Wellpath will auction off its Recovery Solutions subsidiary. The subsidiary operates the Montgomery County Mental Health Treatment Facility.
At the Montgomery County Jail, Wellpath provides medical services to inmates.
Voluntary Chapter 11 bankruptcy was announced by the company last month and said that the reorganization will lower the company’s debt by around $550 million.
Despite the company’s action, Montgomery County Attorney B.D. Griffin said he doesn’t expect any services to be interrupted at the mental health treatment facility or the jail.
Griffin said, the bankruptcy was anticipated as Wellpath had visited with him ahead of time.
The county’s contract with Recovery Solutions, according to Griffin, is set to continue through September, and then to be renegotiated in regard to the services with its new owners. At the Montgomery County Jail, Griffin said no changes are expected with Wellpath.
According to a November 11th release, Recovery Solutions will be sold to an ad hoc lender group that will offer new money financing to Wellpath via a debtor in possession of financing facility. In a court supervised auction and sale process, the members of the ad hoc lender group will serve as the initial bidder on the company’s assets.
Wellpath, additionally, will reorganize their healthcare correction company.
Operations will continue as usual throughout the court-supervised sale process, according to Wellpath’s current expectations.
