Envision Healthcare reaches settlement with committee, bondholders

By Sarah Lizee

Olympia, Wash., Sept. 25 – Envision Healthcare Corp. said it has reached a settlement with its official committee of unsecured creditors and its unsecured bondholders, according to documents filed Sunday with the U.S. Bankruptcy Court for the Southern District of Texas.

The company said that it will amend its Chapter 11 plan to incorporate the terms of the settlement.

The amended plan will provide for the distribution of the following:

• Cash in an amount equal to $41 million, which will be funded from cash comprised of $15.3 million funded by the AmSurg debtors and $25.7 million funded by the EVPS debtors, to holders of EVPS unsecured notes claims and allowed EVPS general unsecured claims against the EVPS debtors; and

• 1.5% of the reorganized Envision parent new common stock to holders of EVPS unsecured notes claims, provided that if the aggregate amount of allowed EVPS general unsecured claims is greater than $150 million, up to $1.5 million of cash in the professional fee escrow account funded by the EVPS debtors on the effective date will be added to the general unsecured claims’ pool and made available for distribution only to holders of allowed EVPS general unsecured claims.

Allowed EVPS third-out claims and allowed EVPS fourth-out claims will be classified in a single class, which will be collectively defined as EVPS unsecured term loan claims. Allowed EVPS unsecured notes claims will be classified separately in a single class.

Holders of pari passu allowed intercompany loan claims will have their claims canceled, released and extinguished on the effective date without any distribution.

Each holder of an allowed EVPS unsecured notes claim will receive its pro rata share of $35 million in cash and 1.5% of reorganized Envision parent new common stock.

The general unsecured claims’ pool will include $6 million in cash, funded on the effective date into an escrow account. Holders of EVPS general unsecured claims will receive their pro rata share of the pool. If the aggregate amount of allowed EVPS general unsecured claims is more than $150 million but equal to or less than $187.5 million, the amount of cash funded into the general unsecured claims’ pool will be increased to provide holders with a 4% recovery in the aggregate. If the aggregate amount of allowed EVPS general unsecured claims is greater than $187.5 million, each holder of an allowed EVPS general unsecured claim will receive its pro rata share of the amounts funded into the general unsecured claims’ pool on the effective date plus $1.5 million in cash from the professional fee escrow account.

Treatment of AmSurg general unsecured claims is unchanged, and these claims are still expected to be paid in full in cash.

EVPS first-out term loan claims and EVPS second-out term loan claims will not receive any recovery on account of unsecured deficiency portions of the claims for purposes of recovery as a EVPS general unsecured claim.

The consenting sponsors will waive their right to and will not receive any recovery on account of any EVPS general unsecured claims. However, the waiver will not include any indemnification claims or rights as beneficiaries under the directors & officers liability insurance policies that are preserved or assumed under the amended plan.

Any recovery on account of allowed EVPS unsecured notes claims held by the consenting sponsors will be assigned for the benefit of holders of allowed EVPS unsecured notes claims without an affiliation to the consenting sponsor.

The consenting sponsors represent and warrant that they are holders of $253.34 million of allowed EVPS unsecured notes claims and agree to not transfer any of their allowed EVPS unsecured notes claims to any entity that is not also a consenting sponsor.

Envision is a Nashville-based provider of physician-led services and post-acute care and ambulatory surgery services. The company filed bankruptcy on May 15 under Chapter 11 case number 23-90342.

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