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Technology-enabled healthcare services giant Modivcare Inc. filed for Chapter 11 protection in a Texas bankruptcy court late Wednesday, setting the stage for a sweeping recapitalization effort aimed at slicing a staggering $1.1 billion in debt.

The company revealed that the restructuring plan already enjoys broad backing from secured lenders, who agreed to inject $100 million in debtor-in-possession financing. The funds will allow Modivcare to maintain daily operations while navigating the high-stakes bankruptcy process.

CEO Frames Bankruptcy as Strategic Reset

Modivcare’s President and CEO, Heath Sampson, struck an optimistic tone in the announcement, calling the move less a retreat and more a calculated reset.

“This recapitalization strengthens our balance sheet and allows Modivcare to accelerate our investment in innovation by combining technology and data with high-touch member engagement,” Sampson said.

He emphasized Modivcare’s central role as a “connector to care,” underscoring the company’s mission to improve access, quality, and costs for payors, providers, and facilities.

Debt Cut, Ownership Shift on the Horizon

The restructuring blueprint is ambitious: Modivcare aims to slash 85% of its funded debt obligations, equating to $1.1 billion, and dramatically reduce its annual debt service payments. In exchange, ownership of the firm will shift to a consortium of existing investors, signaling a dramatic transfer of corporate control as the price of survival.

Court Proceedings and Legal Counsel

A first-day hearing is scheduled for Thursday afternoon before U.S. Bankruptcy Judge Alfredo Perez.

Guiding the healthcare company through its restructuring are powerhouse advisers: Latham & Watkins LLP and Hunton Andrews Kurth LLP as bankruptcy counsel, with Moelis & Company LLC and FTI Consulting handling financial advisory duties.