In a high-stakes bankruptcy showdown, medical implant maker Exactech has struck a $10 million settlement with its equity sponsor, private equity giant TPG, just days before seeking approval to move forward with its Chapter 11 restructuring plan. The agreement, revealed in Delaware bankruptcy court on Friday, comes amid mounting tensions with unsecured creditors, who argue they need more time to assess its impact before a pivotal hearing next week.

A Tumultuous Path Through Bankruptcy

Exactech, a Florida-based orthopedic device manufacturer, filed for Chapter 11 protection in October, weighed down by $352 million in debt and a flood of lawsuits from patients who received recalled joint implants.

The company entered bankruptcy with a pre-negotiated restructuring support agreement backed by its senior lenders, who provided an $85 million debtor-in-possession (DIP) loan and positioned themselves as stalking horse bidders in an auction for Exactech’s assets. Earlier this month, the company accepted a $303 million credit bid from those lenders, further solidifying their control over the process.

The TPG Settlement: A $10 Million Question Mark

During Friday’s hearing, Exactech’s legal team revealed the newly inked $10 million settlement with TPG, which consists of $5 million in cash and $5 million in exit fees.

However, attorneys for the unsecured creditors' committee raised alarms, arguing they have yet to receive thousands of critical documents from Exactech and need more time to determine how the TPG settlement will affect the restructuring plan.

"We don’t even know what this deal really means yet," said committee counsel Cameron Moxley, urging U.S. Bankruptcy Judge Laurie Selber Silverstein to postpone the upcoming March 27 disclosure statement hearing to allow for further discovery.

Judge Weighs Discovery Disputes

Judge Silverstein did not immediately rule on the creditors' request to delay the hearing, but she did issue a mixed ruling on other discovery disputes.

Exactech had sought to force the committee to turn over documents supporting its claims about potential asset values and litigation exposure. But the committee pushed back, stating that their primary source of information was Exactech's own bankruptcy filings.

"There’s just nothing for us to give," Moxley argued.

While the judge ordered the committee to produce a witness, she rejected Exactech’s demands for documents related to how law firms pitched their services to the committee, ruling such materials were off-limits.

What’s Next?

As Exactech fights to push its restructuring plan forward, unsecured creditors remain skeptical about the TPG deal’s true impact and whether the company’s financial disclosures are sufficient.

With the March 27 hearing still on the calendar, the battle over who gets what in the Exactech bankruptcy is far from over.