21st Century Oncology seeks reorganization through Chapter 11 | The Colpitts Law Firm
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21st Century Oncology seeks reorganization through Chapter 11

There are many factors that can influence the overall success of a company in Oklahoma. For a company that involves health care, proposed changes in health insurance can have a tremendous impact, among other factors. A company that claims it is the largest provider of cancer treatment centers has recently experienced the uncertainty that many such companies feel in the current political climate, resulting in its decision to seek reorganization through Chapter 11 bankruptcy.

The company currently operates 179 centers; however, the interim chief executive officer says that the filing will not affect any of them. According to court papers, the filing was prompted by several factors. In addition to the uncertain political climate, the company cited a reduced amount of revenue per cancer treatment and the cost of complying with requirements regarding electronic record keeping. The company has also recently settled a lawsuit that claimed it billed the government for services that were not medically necessary. It will pay $55 million as a result of that lawsuit while admitting no wrongdoing.

Reports indicate that an agreement with the company's bondholders and lenders will eliminate $500 million in debt. Additionally, lenders are providing $75 million as working capital during the reorganization. Creditors will also invest $75 million into the newly reorganized company.

There are many things that a company has some degree of control over -- where it builds the business, who it hires and the products and services it offers. However, they have very little control over the political climate. Often, businesses in Oklahoma are left no choice but to create a new plan to help secure their future success. For many, these plans include reorganizing debt through a Chapter 11 bankruptcy filing.

Source: CNBC, "Cancer treatment firm 21st Century Oncology files for bankruptcy", May 26, 2017

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