Cano Health Inc. won support from lower-ranking creditors for a plan to slash about $1 billion in debt and exit bankruptcy under new owners.
At a court hearing Friday morning, the company and the official committee of unsecured creditors announced the deal, which calls for senior lenders owed about $974 million to take ownership of the Miami-based healthcare company in exchange for canceling most debt.
US Bankruptcy Judge Karen Owens agreed to send Cano’s debt-cutting plan to creditors for a vote before she decides whether to approve the proposal at a court hearing next month. Owens said she would likely sign an order setting up the vote once final wording changes related to the deal are worked out.
Under the reorganization proposal, first-lien lenders would get back about 48% of what they are owed, while lower-ranking creditors, including bondholders owed $306 million, would get back about 1%. Other unsecured creditors would recover as much as 19%.
Cano Health provides services to lower-income patients who rely on government insurance programs. The company was founded by two physicians in 2009, and went public in 2021 through a merger with a blank-check company.
The company filed bankruptcy in February, blaming regulatory hurdles and an expansion effort that didn’t work as planned.
The case is Cano Health Inc., 24-10164, US Bankruptcy Court, District of Delaware (Wilmington).
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