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Surgalign Holdings receives court confirmation of Chapter 11 plan
By Sarah Lizee
Olympia, Wash., Sept. 27 – Surgalign Holdings, Inc. received approval of its Chapter 11 plan from the U.S. Bankruptcy Court for the Southern District of Texas on Wednesday, according to an order.
As background, the debtors filed Chapter 11 to sell their assets and wind down their states post-sale. The company recently closed the sales of its digital health business assets to Augmedics, Inc. and its global hardware business to Xtant Medical Holdings, Inc. for a total of $6.5 million plus assumed liabilities.
The plan provides for the distribution of sale proceeds, as well as the distribution of other cash and monetization of all remaining property of the debtors, including claims and causes of action.
Holders of secured claims and priority non-tax claims will receive full recovery under the plan.
Holders of general unsecured claims are expected to receive a recovery of 4% to 18%. The company estimates about $36,768 and $71,646 in these claims. Holders will receive their pro rata share of distributable cash. They will also receive a pro rata share of wind-down debtor assets, after payment in full of classes that are higher in priority.
Holders of INN seller notes claims, intercompany claims, intercompany interests, interests in the parent company and section 510(b) claims are not expected to receive anything under the plan.
If INN seller notes claims are not subordinated by the court, holders will receive the same treatment as general unsecured claimholders.
Surgalign Holdings is a Deerfield, Ill.-based medical technology company. The company filed bankruptcy on June 19 under Chapter 11 case number 23-90731.
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