SURPRISE: Hedge Fund Deerfield Management-Backed ER Operator Adeptus Health Goes Bankrupt Again

Posted on 01/09/2021


Going public in June 2014, Adeptus Health is an operator of a network of independent emergency rooms with its origins in Texas. In April 2017, Adeptus Health filed for Chapter 11 bankruptcy protection and by October 2017, the company announced its financial restructuring, which included the delisting of its Class A shares. At that time, Adeptus Health’s financial resources were strained by expenditures associated with expanding its footprint. Furthermore at the time, Adeptus Health was the larger operator of freestanding emergency rooms in the U.S.

In April 2017, healthcare-focused hedge fund Deerfield Management bought outstanding bank debt from Adeptus Health Inc. The outstanding loans had amounted US$ 212.7 million and include bridge loans provided to the company’s subsidiary First Choice ER LLC with Bank of America acting as administrative agent. This debtor-in-possession financing gave Deerfield Management control of the company in October 2020.

In December 2020, Adeptus filed for Voluntary Chapter 7 Bankruptcy with listed debts of about US$ 278.2 million and assets of nearly US$ 6.8 million. Deerfield Management remains Adeptus’ largest creditor with an outstanding claim of more than US$ 209.9 million.

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