In a bold move to regain financial footing, LifeScan Global Corp.—maker of the widely used OneTouch blood glucose monitoring devices—has filed for Chapter 11 bankruptcy protection in Texas federal court, citing $1.7 billion in debt and mounting pressure from rapid advances in continuous glucose monitoring (CGM) technologies.
The company’s restructuring plan, supported by its private equity sponsor Platinum Equity, could reduce its debt load by more than 75%, primarily by converting $1.4 billion in liabilities into equity stakes for second-lien lenders. The plan has already gained approval from 97% of secured creditors, according to CEO Valerie Asbury in a first-day declaration filed Wednesday.
Restructuring or Auction? LifeScan Prepares Dual Path Forward
While LifeScan’s preferred path is a reorganization under Chapter 11, attorneys for the Malvern, Pennsylvania-based company revealed in court that it is also open to selling the business should attractive bidders emerge. Any auction would feature a stalking horse bid from existing lenders, ensuring a floor value for the company’s assets.
