GenesisCare’s plan to cut debt by $1.7 billion confirmed by court

By Sarah Lizee

Olympia, Wash., Nov. 21 – GenesisCare Pty Ltd.’s Chapter 11 plan was confirmed on Tuesday by the U.S. Bankruptcy Court for the Southern District of Texas, according to an order.

As background, the debtors have been marketing their U.S. business while simultaneously developing a business plan to reorganize around their rest-of-the-world (ROW) operations in the United Kingdom, Australia and Spain.

During the Chapter 11 process, the debtors pivoted to a “critical path” amalgamation of bids for regions and groups of practices within GC U.S., rather than a whole company bid. The debtors developed in parallel a business plan for a reorganized GC U.S. with a smaller geographical footprint focused on Florida, North Carolina and South Carolina.

The debtors, in consultation with their debtor-in-possession lenders, continue to negotiate with certain potential transaction parties for groups of practices.

The confirmation order approved six sales of the debtors’ U.S. assets and provides the debtors with flexibility to pursue additional asset sales post-confirmation.

To finance the U.S. equitization restructuring, the debtors lined up a fully backstopped $261 million DIP-to-exit facility with the existing lenders that provides $20 million in new money and refinances the existing new-money DIP tranche in full.

The plan deleverages the debtors’ balance sheet by about $1.7 billion, pays ROW unsecured creditors in full, provides recovery to GC U.S. unsecured creditors, and allows the debtors to continue operating as a going concern.

Under the plan, holders of other secured claims will receive payment in full in cash, reinstatement of the claims, or other payment leaving the claims unimpaired.

Holders of priority claims will receive payment in full in cash or other treatment leaving the claims unimpaired.

Holders of senior facilities agreement claims will receive their pro rata share of new warrants and distributable cash, if any, in line with a waterfall recovery.

Holders of shareholder loan claims will not receive any property under the plan.

Holders of general unsecured claims against the ROW debtors will have their claims reinstated or receive payment in full in cash on the effective date or the date due in the ordinary course of business.

Holders of class 5B-1 general unsecured claims against the U.S. debtors will receive their pro rata share of 100% of the interests in a GUC trust. The trust will be funded with $4.5 million for distributions.

Holders of class 5B-2 general unsecured claims against the U.S. debtors will receive their pro rata share of the $350,000 convenience class amount, which will be funded from the GUC cash pool.

Holders of class 5B-3 general unsecured claims against the U.S. debtors will be entitled to pursue applicable insurance coverage, and the automatic stay and any injunction provided for in the plan will be lifted or modified to allow all the prosecution, defense, settlement and administration of their claims against any applicable insurer. These claimholders will not be entitled to a recovery from the GUC trust.

Intercompany claims will be reinstated, converted to equity, distributed, contributed, set off, settled, canceled and released, or otherwise addressed.

Each intercompany interest in the ROW debtors will be reinstated, distributed, contributed, set off, settled, canceled and released, or otherwise addressed.

Each intercompany interest in U.S. debtors will be reinstated, distributed, contributed, set off, settled, canceled and released, or otherwise addressed if the U.S. equitization restructuring occurs. If the sale transaction restructuring occurs, each intercompany interest in the U.S. debtors may be sold according to the applicable sale transaction documents.

Holders of existing TopCo interests will not receive any distribution.

Holders of interests in U.S. TopCo will not receive any distribution if the U.S. equitization restructuring occurs. If the sale transaction restructuring occurs, each existing interest in U.S. TopCo will be reinstated, distributed, contributed, set off, settled, canceled and released, or otherwise addressed.

Holders of section 510(b) claims will not receive anything under the plan.

GenesisCare is a cancer care provider with headquarters in Sydney. The company filed bankruptcy on June 1 under Chapter 11 case number 23-90614.

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